Data centers are experiencing a construction boom to meet the growing computing needs of society, but as more facilities come online, residential utility bills are skyrocketing due to increased demand on the grid and rising infrastructure costs.
Why are data centers contributing to higher electric bills?
As Bloomberg reported, consumers in the Midwest and northern Atlantic coast are seeing the largest spikes in their utility bills, with costs rising by 180% earlier in June. Overall, data centers connected to the PJM Interconnection — a regional transmission organization that manages the power grid for a large portion of the mid-Atlantic and parts of the Midwest — raised electricity costs by a whopping $9.4 billion.
One reason customers are being affected so severely by soaring electricity rates is that Ashburn, Virginia, which is located on the PJM grid, boasts the world's largest concentration of data centers, earning it the nickname "Data Center Alley."
An estimated 70% of the world's internet traffic flows through the region. Because it offers affordable power, extensive fiber optic infrastructure, and is strategically located near Washington, D.C., and major Eastern metropolitan areas, industry leaders saw it as an ideal place to build the data center capital of the world.
While data center operators and tech giants are reaping massive benefits, residents are left to bear the costs of progress. With many people's utility bills already rising due to increasing global temperatures and extreme weather events fueling demand during the summer months, data centers' demand for energy could drive them even higher.
"We have largely taken advantage of an overbuilt system," Brian George, Google's lead of global energy market development and policy, said at a PJM meeting, per Bloomberg. "We are now imposing a significant cost on the system."
Why does this matter?
Due to searing summer temperatures and inflation, Americans' home electricity bills are projected to reach 12-year highs, according to CBS News. That is especially concerning for low-income earners who spend a disproportionately large percentage of their income on energy bills.
"We found that it's going to be another expensive summer for air conditioning because temperatures will stay high, and electricity prices have been rising faster than inflation," energy economist Mark Wolfe, executive director of the National Energy Assistance Directors Association, which performed an analysis on electricity costs, told CBS.
If consumers are already burdened with higher electric bills because of extreme temperatures, they likely won't be able to afford further increases from data centers' energy needs.
How can you save money on electric bills?
Thankfully, there's an easy solution to help offset some of your electricity costs and leave more money for enjoying the summer. According to SolarReviews, the average homeowner could save around $1,500 on electricity bills annually by installing rooftop solar panels.
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Do you think your energy bills are too high? Click your choice to see results and speak your mind. |
Always 👍 However, because the upfront investment isn't in everyone's budget, leasing solar panels is another great option that allows homeowners to reap the benefits without paying thousands of dollars in installation fees.
Through Palmetto's LightReach solar leasing program, customers can have solar panels installed for no or minimal upfront costs and enjoy a fixed monthly rate for the electricity generated.
If leasing isn't your cup of tea, EnergySage provides free tools to help you get personalized quotes from pre-screened installers, allowing you to find a system that suits your needs at the best price. To learn more about the pros and cons of leasing and buying solar panels, Palmetto has a detailed guide to help you make an informed decision.
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