As tech companies announce plans for massive new data centers, consumers are increasingly worried that the AI-driven gold rush will ultimately drive up the price they pay for electricity, according to a new survey. The report, commissioned by solar installer Sunrun, found that 80% of consumers are worried about the impact of data centers on their utility bills.
These consumer concerns are not unfounded. Electricity demand in the United States held steady for over a decade, according to the U.S. Energy Information Administration. Over the last five years, commercial users including data centers and industrial users began consuming significantly more power from the grid, with annual growth rising 2.6% and 2.1%, respectively. Meanwhile, residential use only grew by 0.7% annually.
Data centers today consume about 4% of the electricity generated in the United States, which is more than double their share from 2018. By 2028, consumption is forecasted to rise to between 6.7% and 12%, according to the Lawrence Berkeley National Laboratory.
Electricity generation has managed to meet demand so far thanks to a surge in new capacity from solar, wind, and grid-scale battery storage. Big tech companies have been signing large deals for new utility-scale solar power, attracted by its low cost, modularity, and speed to power. Solar farms can start delivering power to data centers before they are fully completed, and a new project typically takes around 18 months to finish.
The Energy Information Administration expects renewables to dominate new generating capacity through at least the next year. This trend would likely have extended beyond 2026, but experts predict a Republican repeal of key parts of the Inflation Reduction Act will hamper the growth of renewables.
Meanwhile, natural gas, another source of energy favored by data center operators, has not met the moment. Production has been rising, but most of the new supplies have gone toward feeding exports rather than the domestic market. Consumption by electricity generators rose by 20% between 2019 and 2024, while exporters consumed 140% more.
New natural gas power plants will not be ready in time to help, either, since they take around four years to complete, according to the International Energy Agency. A backlog of turbines used by gas-fired power plants has only compounded the problem. Manufacturers are quoting delivery dates up to seven years out, and newly announced production capacity is unlikely to change the situation.
Slow natural gas buildouts coupled with hindered renewables have put data center developers in a difficult position. While AI and data centers are not entirely responsible for increasing electricity demand, as industrial users have been nearly as thirsty for power, they have been leading the headlines.
AI is likely to be the focus of consumer frustration. More people are concerned about the technology than are excited about it, according to a Pew survey. This is no surprise given that many employers have been wielding the tool as a way to cut headcount rather than to improve or augment employee productivity. When you add rising energy prices into the mix, you can begin to see how a public backlash might be brewing.