The Phoenix data center boom has made the city one of the fastest-growing data center markets in the United States. Attracting tech giants like Google, Microsoft, Meta, and Amazon Web Services, the region’s ideal mix of low natural disaster risk, affordable land, and business-friendly incentives is fueling a massive data center construction boom across metro Phoenix.
But while these facilities from the Phoenix data center boom promise digital growth and economic returns, they also bring substantial concerns. Specifically, the water and energy usage of Phoenix data centers is putting pressure on Arizona’s power grid and its already limited water supply creating a direct conflict with the Valley’s rapidly expanding housing sector.
Why Phoenix Is Becoming a Top Data Center Destination
Several factors make the Phoenix metro area a prime location for data center development:
- Low disaster risk (minimal hurricanes, earthquakes, or flooding)
- Established fiber optic infrastructure
- Proximity to West Coast tech hubs
- Available land and competitive construction costs
- Tax incentives for data centers in Arizona
As a result, Arizona is now home to over 50 major data centers, with billions in additional investment already announced or under construction. But this digital transformation comes with a growing footprint and some heavy environmental costs.
How Much Electricity Do Phoenix Data Centers Use?
Large-scale data centers are among the most energy-intensive buildings in the modern economy. A single hyperscale data center in Phoenix may consume between 50 to 100 megawatts of electricity, enough to power up to 80,000 homes. This energy is used to keep servers running 24/7 and to cool their systems, especially during the region’s extreme summer heat.
Arizona utilities such as Salt River Project (SRP) and Arizona Public Service (APS) report that demand is rapidly increasing, with data center electricity consumption driving much of the growth. SRP projects a 30% rise in electricity use by 2035, citing data centers as one of the top contributors…