As technology firms promote their strategies for large-scale new data centers, a new survey reveals growing consumer apprehension that the AI boom will ultimately inflate their electricity costs.
The report, which was commissioned by solar panel installation company Sunrun, indicated that 80% of consumers are concerned about how data centers will affect their energy bills.
These consumer worries are justified.
The U.S. Energy Information Administration (EIA) reports that electricity demand in the United States remained consistent for more than ten years. However, over the past five years, commercial users, including data centers, and industrial users have significantly increased their consumption from the power grid, with annual growth rates of 2.6% and 2.1%, respectively. Meanwhile, residential consumption only increased by 0.7% each year.
Today, data centers account for approximately 4% of the electricity generated in the United States, which is more than double their share in 2018. The Lawrence Berkeley National Laboratory forecasts that consumption will rise to between 6.7% and 12% by 2028.
Generation has successfully satisfied demand due to a rise in new capacity from solar, wind, and large-scale battery storage. In particular, major tech companies have been securing substantial agreements for new utility-scale solar energy, attracted by its affordability, modularity, and rapid deployment. Solar farms can supply power to data centers even before they are fully operational, and a typical new project takes about 18 months to complete.
The EIA anticipates that renewables will continue to dominate new generating capacity for at least the next year. While this trend would likely have continued past 2026, experts predict that a Republican repeal of key provisions of the Inflation Reduction Act will hinder the growth of renewables.
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Meanwhile, natural gas, another favored energy source among data center operators, has fallen short. Although production has increased, most of the new supplies have been directed toward exports rather than the domestic market. Electricity generators’ consumption rose by 20% between 2019 and 2024, while exporters consumed 140% more.
New natural gas power plants will also not be completed in time, as they require approximately four years to build, according to the International Energy Agency. The problem has been compounded by a backlog of turbines used by gas-fired power plants. Manufacturers are quoting delivery times of up to seven years, and newly announced production capacity is unlikely to change this.
Slow natural gas development, combined with hampered renewables, has created challenges for data center developers.
While AI and data centers are not solely responsible for the increasing electricity demand — industrial users have consumed nearly as much — they have been the primary focus of attention.
AI is likely to be the target of consumer discontent: A Pew survey indicates that more individuals are concerned about the technology than enthusiastic about it. This is not surprising, considering that numerous employers have been utilizing the tool to reduce staff rather than enhance employee productivity.
Combine this with rising energy costs, and the potential for a public backlash becomes evident.
