Renewable energy is evolving as the primary energy source for large data centers, according to a new report.
The 2026 Global Data Center Outlook from commercial real estate services giant JLL points out that the pivot toward big data centers being powered by renewable energy stems from rising electricity costs and tightening carbon reduction requirements. In the data center sector, renewable energy, such as solar and wind power, is expected to outcompete fossil fuels on cost, the report says.
The JLL forecast carries implications for the Houston area’s tech and renewable energy sectors.
As of December, Texas was home to 413 data centers, second only to Virginia at 665, according to Visual Capitalist. Dozens more data centers are in the pipeline, with many of the new facilities slated for the Houston, Austin, Dallas-Fort Worth and San Antonio areas.
Amid Texas’ data center boom, several Houston companies are making inroads in the renewable energy market for data centers. For example, Houston-based low-carbon energy supplier ENGIE North America agreed last May to supply up to 300 megawatts of wind power for a Cipher Mining data center in West Texas.
The JLL report says power, not location or cost, will become the primary factor in selecting sites for data centers due to multi-year waits for grid connections.
“Energy infrastructure has emerged as the critical bottleneck constraining expansion [of data centers],” the report says. “Grid limitations now threaten to curtail growth trajectories, making behind-the-meter generation and integrated battery storage solutions essential pathways for sustainable scaling.”
Behind-the-meter generation refers to onsite energy systems such as microgrids, solar panels and solar battery storage. The report predicts global solar capacity will expand by roughly 100 gigawatts between 2026 and 2030 to more than 10,000 gigawatts.
“Solar will account for nearly half of global renewable energy capacity in 2026, and despite its intermittent properties, solar will remain a key source of sustainable energy for the data center sector for years to come,” the report says.
Thanks to cost and sustainability benefits, solar-plus-storage will become a key element of energy strategies for data centers by 2030, according to the report.
“While some of this energy harvesting will be colocated with data center facilities, much of the energy infrastructure will be installed offsite,” the report says.
Other findings of the report include:
- AI could represent half of data center workloads by 2030, up from a quarter in 2025.
- The current five-year “supercycle” of data center infrastructure development may result in global investments of up to $3 trillion by 2030.
- Nearly 100 gigawatts worth of new data centers will be added between 2026 and 2030, doubling global capacity.
“We’re witnessing the most significant transformation in data center infrastructure since the original cloud migration,” says Matt Landek, who leads JLL’s data center division. “The sheer scale of demand is extraordinary.”
Hyperscalers, which operate massive data centers, are allocating $1 trillion for data center spending between 2024 and 2026, Landek notes, “while supply constraints and four-year grid connection delays are creating a perfect storm that’s fundamentally reshaping how we approach development, energy sourcing, and market strategy.”
