The rapid expansion of AI technologies has triggered a surge in data center construction, benefiting companies like Nvidia and fueling unprecedented growth in the power industry. Data centers are projected to double their power demand by 2029, according to JLL, prompting developers and tech companies to secure energy capacity aggressively. While nuclear and natural gas have seen increased interest, solar power has emerged as a significant beneficiary in the short term. Despite its intermittency, the advantages of solar energy have led to a flurry of large-scale deals. Unlike advanced nuclear reactors, which are not yet commercially viable, solar power is a proven technology. Furthermore, solar farms can be built much faster than new natural gas plants, with an average completion time of about 18 months. Solar is also one of the most cost-effective sources of new generating capacity. Since the beginning of 2025, tech companies and data center operators have supported 12 solar deals, each adding over 100 megawatts of capacity to the grid. Meta started the year with a 200-megawatt solar deal with Engie for a solar farm near its Texas data center. Meta already possessed over 12 gigawatts of renewable generating capacity at the time. Later in January, the Stargate AI partnership involving OpenAI, Oracle, and SoftBank Group was reported to be partially powered by solar, with SB Energy developing solar installations backed by grid-scale batteries. Meta concluded January with a 595-megawatt deal with Zelestra. February saw continued activity, with Meta investing in a 505-megawatt solar project with Cypress Creek Renewables in Texas. Microsoft also entered the scene, adding 389 megawatts of solar through a deal with EDP Renewables North America, covering three solar farms in Illinois and Texas. This move supports Microsoft's commitment to zero-carbon power. Amazon made a substantial purchase as well, backing a hybrid project on the Iberian Peninsula that includes wind, solar (212 megawatts), and pumped-hydroelectric storage. Data center operators are also investing in solar outside the U.S. In India, CtrlS built a 125-megawatt facility in two phases, completed in June 2024 and early February. Telecom Argentina agreed to purchase power from a 130-megawatt solar farm developed by MSU Green Energy in South America. In March, Microsoft expanded its solar portfolio with three projects in Illinois, Michigan, and Missouri, developed by AES, providing 475 megawatts of capacity. Cisco joined the trend with a 100-megawatt deal with X-Elio for two Texas solar projects. Meta added another 200 megawatts of solar in a deal with RWE, building a solar farm southeast of Austin. In Italy, Data4 signed a 10-year deal with Edison Energia for a 148-megawatt solar farm near Rome. As tech companies aggressively integrate AI into their products, data centers are expanding to meet the demand, requiring substantial power. Solar power is uniquely positioned to meet this need. Utility-scale solar is already one of the cheapest forms of new generating capacity, even before subsidies, and it can be deployed and commissioned quickly, allowing data centers to access power incrementally. These factors give solar a significant near-term advantage, making it likely that deals with Big Tech and data center developers will continue.
