A typical 200 MW data center requires more than 1,000 acres of conventional solar panels to meet its energy needs. Alamy

America’s data center boom is colliding with shifting federal energy policies and mounting challenges for traditional clean energy projects, including political obstacles, community resistance, and technical limitations.

The latest sign of this tension came in October, when the Trump administration canceled the Esmeralda 7 project, a massive solar farm in the Nevada desert that had been the largest renewable energy initiative to advance through federal permitting under the Biden administration. The Bureau of Land Management updated the project’s webpage to show that its environmental review had been “cancelled.”

This decision comes as the rapid expansion of data centers strains electrical grids nationwide and intensifies debates over how to meet their enormous energy demands.

A Grid Under Pressure

Nowhere is the strain more evident than in Virginia, the nation’s data center capital. In May, the PJM Interconnection, which operates the electric grid serving the state, issued an unprecedented warning: under extreme summer conditions, the region’s power supply could fall short of demand.

Virginia already imports more electricity than any other state – more than 50 million MWhs in 2023, according to the U.S. Energy Information Administration. That demand is rising rapidly, fueled by data centers and the energy-intensive requirements of AI, cryptocurrency mining, and high-density computing.

Related:Solar-Powered Data Centers: Why the Forecast Is Only Partly Sunny

The trajectory alarms officials. A 2024 report from the state’s Joint Legislative Audit and Review Commission cautioned that at the current pace of growth, electricity consumption in Virginia could triple by 2040.

The power crunch has made solar energy increasingly attractive to data center operators. In Virginia, the streamlined Permit By Rule process enables projects under 150 MW to transition from application to operation within two years or less. Behind-the-meter solar installations for data centers can be completed within a matter of months.

“Data centers need clean, cheap energy, and they need it fast,” Mohammed Njie, CEO of Janta Power, told Data Center Knowledge. “It is therefore not a surprise that solar energy is emerging as an increasingly important factor in data centers’ energy mix, yet its full potential remains underutilized.”

Solar’s Multiple Hurdles

But solar power faces growing resistance. In 2024, Virginia counties rejected more solar megawatts than they approved, according to the University of Virginia’s Weldon Cooper Center. In many rural areas, where solar farms are often developed, residents increasingly view the projects as industrial encroachment rather than clean energy infrastructure.

Related:Virginia Faces New Data Center Growth Headwinds

The challenges extend beyond local opposition. A typical 200 MW data center can require more than 1,000 acres of conventional solar panels, Njie said. Traditional solar systems achieve a capacity factor of around 22% or less, meaning they generate roughly one-fifth of their rated capacity over time – a limitation that makes it difficult for solar alone to meet the constant, high-energy demands of data centers.

“While many solar developers seek direct power purchase agreements with off-takers, solar cannot reliably power data centers as a behind-the-meter solution,” said Andy Cvengros, executive managing director and co-lead of US data center markets at JLL, a commercial real estate firm.

Currently, solar’s greatest value lies in the energy it contributes to the broader electrical grid rather than directly powering data centers. “The data center sites under development require significantly more power capacity than solar installations can independently deliver,” Cvengros said.

Corporate Solar Surge

Despite the limitations, technology giants are racing to secure solar capacity. Microsoft has added more than 860 MW of new solar capacity in 2024 alone, with projects spanning Illinois, Texas, Michigan, and Missouri, bringing its clean energy portfolio to more than 34 GW.

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Meta has similarly scaled its solar footprint in Texas, developing three major projects totaling over 900 MW. Amazon leads all US companies in solar development, with 13.6 GW of solar capacity in progress – more than the total installed capacity of most states. This includes over 20 projects in Texas, such as a 500-MW solar farm in Webb County.

Amazon Solar Farm – Eastern Shore, located in Accomack County, Va. (Source: Community Energy Inc.)

Google is taking a hybrid approach, combining solar energy and battery storage. The company operates 312 MW of battery capacity and has entered a $20 billion partnership with Intersect Power to develop co-located clean energy and data center facilities.

As federal support for renewable energy projects has become uncertain, Janta Power CEO Njie believes market forces will continue driving solar adoption. “Subsidies should not be the only concern in the solar discussion, as efficiency, reliability, and scalability should be given the top priority,” he said. “It is true that there is no decrease in the demand for clean energy, particularly in the power-[intensive] sectors like data centers.”

The increasing corporate investment in solar power, he added, could transform data centers from energy consumers into primary consumers of the most advanced solar technologies, potentially reshaping industries in the process.

About the Author

Contributor

Nathan Eddy covers data center trends and technologies across multiple industries. A graduate of Northwestern University’s Medill School of Journalism, he is also a documentary filmmaker specializing in architecture and urban planning. He currently lives in Berlin, Germany.