How Arizona’s Data Center Boom Is Driving Up Your Electric Bill
Are your electric bills out of control? You’re not imagining things. Electricity rates are rising throughout the country, and Arizona is getting hit hard.
So, what’s behind the rising costs?
There are a lot of factors at play, but one of the biggest is AI data centers. New data centers are popping up everywhere as the US jockeys to win the global AI race, and Arizona is a hotspot. But data centers suck up a lot of power, and that’s driving up energy costs for everyone.
Here’s a closer look at what’s happening and how it’s impacting your bill.
The Arizona Data Center Boom
A data center is, essentially, a massive storage facility for computer equipment. Data centers house hardware, like servers, storage systems, and networking equipment, that make all kinds of technology possible, including artificial intelligence (AI).
There have been data centers in the US—and in Arizona—for a long time. But the demand for them is soaring alongside the AI boom. There are currently 163 in Arizona, which makes us the 6th most popular state for data centers in the US.
It doesn’t look like things are going to slow down anytime soon, either. Demand for third-party data centers quadrupled between 2020 and 2024 and is still growing.
How Data Centers Impact Electricity Costs
Data centers support essential technology, but they also present a number of problems, especially when it comes to energy usage.
It takes a massive amount of energy to run a data center. According to research from the Department of Energy, data centers consumed about 4.4% of total US electricity in 2023 and are expected to consume approximately 6.7 to 12% of total US electricity by 2028.
In other words, demand for electricity is skyrocketing. Since electricity costs are largely dependent on supply and demand, a huge spike in demand is bad news for everyone.
Surges in demand also put increased strain on the electric grid, necessitating infrastructure improvements, which cost money. Those costs get passed on to homeowners through electricity rate increases.
APS and Tucson Electric Power are both seeking a 14% rate increase for 2026, citing unprecedented energy demand from data centers and infrastructure costs as key reasons for the increase.
These increases aren’t just happening in Arizona, either. A Bloomberg News analysis of wholesale electricity prices found that “electricity costs as much as 267% for a single month than it did five years ago in areas located near significant data center activity.”
What Can You Do About It?
The only way to escape the never-ending cycle of electricity rate increases is to generate your own power. Solar panels make that possible for any homeowner.
Solar panels are like your own personal power plant. They turn sunlight into clean electricity for your home, powering it directly whenever the sun is shining. That significantly reduces the amount of electricity you have to buy from the utility, lowering your monthly bills.
The impact is even greater if you install solar panels with battery storage. The battery allows you to store electricity generated during the day so you can run your home on solar power around the clock, even when the sun isn’t shining. With this setup, you can be almost fully self-reliant, buying little to no power from the grid.
Those savings add up quickly, especially as electricity costs continue to rise. You’ll save on rising bills and avoid inevitable rate increases, all while using clean, renewable energy that doesn’t hurt the planet.
At SouthFace Solar & Electric, we’ve been installing residential solar power systems in Arizona since 2008. We’re a locally owned and operated solar installer, and we care deeply about helping our fellow Arizonans take control of their energy costs with solar. If you’re curious, give us a call. We would be happy to tell you more and help you decide whether solar makes sense for your home.
