The rush of leveraging topics around AI has led tech companies to dramatically expand their data center footprint. This is good news for companies like Nvidia, but it has also led to unprecedented growth in the electricity industry.
By 2029, new and expanded data centres are expected to double the sector’s electricity demand by 2029, according to JLL. As a result, developers and tech companies have been working overtime to lock their capabilities. Nuclear and natural gas are boosted by forecast demand, but few technologies like the Sun have benefited in the short term.
Solar power suffers from what experts call intermittent, and it won’t be produced unless the sun is shining, but the benefits are so important that companies are making large transactions at a rapid pace.
Unlike advanced nuclear reactors that have not yet been deployed on a commercial scale, solar power is a proven technology. And unlike new natural gas power plants that take years to plan and build, the average completion time for new solar farms is around 18 months. Furthermore, this is one of the lowest cost sources of new generation capabilities.
Since its launch in 2025, high-tech companies and data center operators have supported 12 solar transactions, each adding more than 100 megawatts of capacity to the grid.
January
Meta began the year with a 200 megawatt solar contract with multinational utility Engie. The purchase was headed to a solar farm near one of the company’s existing data centers in Texas. At the time of the contract, Meta already had generation capacity of over 12 gigawatts in its renewable portfolio.
Later in January, it was reported by Bloomberg that Openai, Oracle, and Softbank Group’s Stargate AI partnerships will be driven, at least in part, by solar. SB Energy, part of SoftBank’s portfolio, is expected to develop solar equipment backed by grid-scale batteries.
Meta concluded the month with another large solar contract. The contract was 595 megawatts in capacity.
February
Meta continues its winning streak in February and is investing in a 505 megawatt solar project with Cypress Creek Renewable Energy, which is developing a massive installation in Coleman County, Texas, about 150 miles northwest of Austin.
Microsoft also entered the fight in February. The company has long been a renewable energy buyer, driving the business and adding 389 megawatts of solar to its deal with EDP Renewables North America. The deal covers three different solar farms in two Illinois and in Texas. This purchase helped us grasp the pledge that Microsoft would use zero carbon power to promote its operations.
Amazon also made large-scale purchases to support hybrid projects in the Iberian Peninsula, including wind, solar power and pumped hydroelectric storage. The transaction includes a total of 476 megawatts, of which 212 megawatts are solar.
Outside the US, data center operators are also investing in solar. In India, CTRLS has built its own 125 megawatt facility in two phases. The first half ended in June 2024 and was completed in early February. In South America, Telecom Argentina has agreed to purchase electricity from a 130 megawatt solar farm developed by MSU Green Energy.
march
Microsoft added three more solar developments in March, focusing again on the Midwest. The project spans Illinois, Michigan and Missouri and is being developed by AES. Together, we will provide Microsoft with 475 megawatt capacity and add a considerable 34 Gigawatt portfolio.
Cisco joined the game on a 100 megawatt deal with X-Elio, a solar developer owned by Brookfield, an asset manager who has a big bet on renewables. The power purchase agreement confirms Cisco’s purchasing capabilities from two different Texas solar projects.
Meta added another 200 megawatts of solar to its portfolio in a deal with RWE in March. The solar farm will be built southeast of Austin.
In Italy, data center operator Data4 has signed a 10-year contract with utility Edison Energy to purchase electricity from a solar farm located 148 megawatts northwest of Rome.
There are more deals
Data centers are expanding to maintain the pace as tech companies compete to add AI to seemingly all products and possible markets. Its growth requires strength, and few technologies are positioned in the same way as solar power generation.
Utility scale solar is one of the cheapest forms of new generation capabilities without counting subsidies, covering everything except onshore wind. It is also quick to deploy and can be outsourced in stages, allowing the data center to unleash power before the entire project is finished.
These qualities are combined to give solar a short-term advantage, and have earned deals with leading high-tech companies and data center developers. That’s a likely trend to continue.
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