The rapid expansion of data centers is shaped significantly by their location, particularly in urban areas where electricity is abundant and affordable. According to a recent report by Upwind, the fastest-growing cities for data centers in the U.S. are largely defined by their access to power.
Leading the list is the Las Vegas/Reno region, where data center power capacity is expected to increase by a staggering 953%, necessitating 3,812 MW of energy, enough to supply electricity to approximately 3.1 million homes. This growth is facilitated by lower electricity rates—35% below the national average—and a strong reliance on renewable energy from sources like geothermal and solar.
Following Las Vegas/Reno is Salt Lake City, slated for a 699% boost in capacity, with an anticipated energy demand of 1,271 MW. The city’s growth in data centers is attributed to favorable tax incentives from the Utah state government, drawing major players like Meta and Google.
Phoenix ranks third, with a projected capacity increase of 554%, translating to an energy requirement of 5,340 MW—sufficient for 4.4 million homes. Arizona’s energy mix, which emphasizes natural gas and renewable energy, helps keep production costs low.
Atlanta and Dallas-Fort Worth are also on the list. Atlanta’s capacity is expected to grow by 484% to 3,125 MW, spurred by significant investment from tech giants like Microsoft, which is pouring $1.8 billion into the area for substantial upgrades. Meanwhile, Dallas-Fort Worth anticipates a 355% rise, needing around 4,396 MW—enough to power around 3.6 million homes. Its competitive land costs make it an attractive hub compared to pricier markets like Boston or Silicon Valley.
While Northern Virginia remains the dominant data center destination, standing out as the world’s largest hub with energy needs poised to double that of the next closest competitor, Phoenix. As new facilities come online, they will require enough electricity to power over 9 million households. However, the demand for power in Virginia is projected to rise by 85% over the next 15 years, posing a challenge to sustaining this growth.
The data center industry is seen as a significant economic driver, with typical centers contributing upwards of $243.5 million locally and creating a multitude of jobs. As the demand for data storage and processing continues to skyrocket, these cities are well-positioned to capture the emerging opportunities within this sector.
