Why are data centers bad?

1. Electricity bills

This is the charge with the most money behind it. In PJM, the nation’s largest grid operator[6], the Independent Market Monitor calculated that data center load raised capacity market revenues in the 2026/2027 auction by about $7.3 billion, or 82%[7], and by a combined $23.1 billion across three auctions[7], and it names data center growth as the main cause of today’s high capacity prices[7]. In Virginia, JLARC estimated that a typical Dominion Energy residential customer could see generation and transmission costs rise by $14 to $37 a month, in inflation-adjusted dollars, by 2040[2]. It also warned that if forecast demand never arrives, or several large data centers close, existing customers could be left paying for plants and power lines that are no longer needed[2].

The evidence is not one-sided. A 2025 study by Lawrence Berkeley National Laboratory and Brattle found that load growth has generally lowered retail prices in recent years by spreading fixed costs over more sales[4], while cautioning that this may not hold where new supply and delivery infrastructure is costly and constrained[4]. JLARC found that Virginia’s current rates properly assign costs to the customers who cause them, data centers included[2]. Regulators are also tightening terms: AEP Ohio now requires large new data center customers to pay for at least 85% of the energy they sign up for, even if they use less[8], and Virginia created a separate rate class for customers above 25 MW[9]. How much electricity data centers use has the national figures.

2. Water

U.S. data centers directly used about 17 billion gallons of water in 2023, roughly three times the 5.6 billion gallons of 2014, by an estimate cited by the Congressional Research Service[3]. The biggest single sites can use up to 5 million gallons a day, according to reporting cited by the Environmental and Energy Study Institute[10], and in evaporative cooling about 80% of the water drawn is lost to evaporation rather than returned[11]. The larger footprint is indirect: generating the electricity data centers used in 2023 consumed roughly 211 billion gallons[10], and nearly half of U.S. data center servers draw power from plants in water-stressed regions[12].

Most data centers are not water giants, though. JLARC found most use about as much water as an average large office building, or less, while a few use substantially more[2]. Why data centers use so much water has the figures project by project.

3. Noise

In Loudoun County, Virginia, noise complaints are among the most persistent issues residents raise with officials, and they often concern a tonal hum[13], which can grate more than broadband noise of similar volume[13]. JLARC found the low-frequency noise data centers emit is not loud enough to damage hearing and rarely loud enough to break noise ordinances, but that because it never stops, it has at times been a problem near homes[14]. A large majority of data centers draw no noise complaints at all because of where they are sited or how they are designed[14]. Are data centers loud? has the decibel limits localities have adopted.

4. Air pollution

Backup generators are the familiar source. In Virginia, JLARC found almost every existing data center relies on Tier 2 diesel generators, which the state allows to run only in emergencies or for maintenance testing, and calculated that they account for under 4% of regional nitrogen oxide emissions in Northern Virginia[14]. The sharper concern now is campuses that burn gas continuously for their own power. In Memphis, the NAACP and another group appealed the air permit for 15 gas turbines at xAI’s data center[15], alleging that as many as 35 turbines had been on site before permits were sought[15]; the county’s air pollution control board dismissed the appeal as moot in December 2025[16]. Researchers whose work Caltech reported in December 2024 estimated that data center air pollution could cause as many as 1,300 premature deaths a year in the U.S. by 2030[17], a modeled national figure rather than a measurement at any site. Are data centers bad for your health? and behind-the-meter power go further.

5. Land

Data centers take a great deal of ground. Virginia’s alone cover 7,200 acres[14], and single proposals can be vast: the Prince William Digital Gateway, declared dead in July 2026 after more than two years of legal fighting, would have covered 2,100 acres near Manassas National Battlefield Park[18]. How big is a data center? compares real sites.

6. Tax breaks for few permanent jobs

At least 36 states exempt data center equipment from sales and use tax[19], and the exemptions are expensive. Virginia estimates its break cost nearly $2 billion in lost state and local revenue in fiscal 2025[20]; Texas expects to forgo $3.2 billion over two years[21]. The permanent payroll that results is small next to the construction crowd: data center representatives told JLARC that a typical 250,000-square-foot building may have about 50 full-time workers, half of them contractors[22], compared with about 1,500 on site at the height of construction[22]. JLARC found Virginia’s exemption returned 48 cents in state revenue for every dollar it cost[2]. The tax breaks tracker lists project-level deals.

The grid and the climate

Two broader worries run under the local ones. Loudoun County says Northern Virginia’s regional grid has become strained, largely because data center demand has grown for more than 20 years[23]. And the International Energy Agency projects that natural gas will be the largest source of the additional electricity U.S. data centers use through 2030[24]. Globally, the IEA puts emissions from data center electricity at 180 million tonnes today[25], under 1.5% of energy-sector emissions, though among the fastest-growing sources[25]. Are data centers bad for the environment? weighs that evidence.

What supporters point to

Supporters’ case is mostly economic: among Americans who would welcome a data center nearby, two-thirds cite economic benefits, most often jobs[1]. The clearest gain is money for local government. JLARC found data center revenue made up 31% of total local tax revenue in Loudoun County[2], and local staff said it let Loudoun and Prince William lower their real estate tax rates[2]; Prince William reported $293.7 million in data center tax revenue for tax year 2024[26]. JLARC put the industry’s yearly contribution to Virginia at $9.1 billion in GDP and 74,000 jobs, most of it from construction rather than operations[22], and found the state’s data center workers earn about $100,000 a year on average[2]. Data center pros and cons weighs both sides for a community.

How public opinion has shifted

Pew Research Center surveyed 10,548 U.S. adults from July 20 to August 9, 2026[5]. It found 54% consider data centers mostly bad for the environment, against 39% in January[5]; half see them as mostly bad for home energy costs (38% in January)[5]; and 49% say they are mostly bad for quality of life nearby, up from 30%[5]. On local jobs the share saying “mostly bad” rose from 15% to 24%[5], and on jobs and tax revenue Americans are now split, with similar shares, between 21% and 24%, calling data centers mostly good and mostly bad[5].

Gallup found in March 2026 that seven in 10 Americans oppose building an AI data center in their area, including 48% who are strongly opposed[1], a larger share than the 53% who oppose a nuclear power plant nearby[1]. Half of opponents named the resources data centers consume, with 18% each mentioning water and energy[1].

Common questions

Why are data centers bad?

Critics cite higher electricity bills, heavy water use, constant noise, air pollution from backup generators and on-site gas turbines, the land they take, and costly tax breaks for relatively few permanent jobs. The evidence varies by issue and by site: most data centers use about as much water as a large office building, for example, while a few use far more.

Do data centers raise electric bills?

They can. Virginia’s JLARC estimated a typical Dominion residential customer could pay $14 to $37 a month more for generation and transmission by 2040, and PJM’s market monitor tied $23.1 billion in capacity market revenues to data center load. A 2025 LBNL study found load growth has generally lowered prices in recent years, but warned that may not hold where new supply is costly.

Why do people oppose data centers?

In Gallup’s March 2026 survey, 71% of Americans opposed an AI data center in their area. Half of opponents named the resources data centers use, including 18% each who mentioned water and energy.

Are data centers bad for the environment?

They add emissions through the electricity they use and use water for cooling and at power plants. The IEA puts emissions from data center electricity at 180 million tonnes, under 1.5% of energy-sector emissions. In Pew’s 2026 survey, 54% of Americans called data centers mostly bad for the environment.

Are there benefits to data centers?

Yes, mainly local tax revenue and construction work. Data center revenue made up 31% of Loudoun County’s local tax revenue, according to Virginia’s JLARC, and the industry adds an estimated $9.1 billion a year to Virginia’s GDP, mostly from construction.

Sources

1. Americans Oppose AI Data Centers in Their Area
   Gallup · 2026-05-13
   4 source excerpts

   “Seven in 10 Americans oppose constructing data centers for artificial intelligence in their local area, including nearly half, 48%, who are strongly opposed.”

   “two-thirds of those in favor of building data centers in their area cite the economic benefits, including 55% who mention increased job opportunities specifically.”

   “In the same March survey, 53% of Americans say they oppose building a nuclear energy plant in their area, far less than the 71% opposed to data center construction.”

   “Half of opponents mention data centers' excessive use of resources, including 18% each mentioning their use of water and energy.”

2. Data Centers in Virginia (JLARC Report 598)
   Joint Legislative Audit and Review Commission (JLARC), Virginia General Assembly · 2024-12-09
   8 source excerpts

   “A typical residential customer of Dominion Energy could experience generation- and transmission-related costs increasing by an estimated $14 to $37 monthly in constant (or real) dollars by 2040 (independent of inflation).”

   “One risk is that utilities will build more generation and transmission infrastructure than is needed if forecast demand does not materialize, or several large data centers close. This could strand utilities with infrastructure costs that would have to be recouped from their existing customer base.”

   “The study found that current rates appropriately allocate costs to the customers responsible for incurring them, including data center customers.”

   “Most data centers use about the same amount of water or less as an average large office building, although a few require substantially more, and some require less than a typical household.”

   “Return in revenue per $1 spent 48¢ ... Jobs added 84 jobs [data center exemption] ... Jobs added 58 jobs [average Virginia incentive]”

   “Loudoun and Prince William have the largest and most mature markets, and data center revenue accounted for 31 percent and 7 percent, respectively, of total local tax revenue (Figure 2-4).”

   “Local government staff indicated data center revenue has allowed their locality to lower real estate tax rates (Loudoun and Prince William),”

   “On average, data center employees and contractors earn about $100,000 per year, varying based on job role and area of the state.”

3. DATA CENTERS AND WATER: What Congress found
   Western Water · 2026-08-07
   Source excerpt

   “One study cited by the Congressional Research Service estimated that U.S. data centers directly used approximately 17 billion gallons of water in 2023. That compares with about 5.6 billion gallons in 2014.”

4. Factors Influencing Recent Trends in Retail Electricity Prices in the United States: What do we know? Where are the gaps?
   Lawrence Berkeley National Laboratory and The Brattle Group · 2025-10
   2 source excerpts

   “Load growth at the state level has tended to depress retail electricity prices in recent years, by spreading fixed costs over greater load.”

   “Importantly, this relationship need not always exist: a higher growth future can increase retail prices if new supply and delivery infrastructure is constrained and costly—as it currently appears to be in some or many states.”

5. More Americans now say data centers are negative for the environment, energy costs and more
   Pew Research Center · 2026-09-22
   6 source excerpts

   “More than half of Americans (54%) now say data centers are mostly bad for the environment, up from 39% in January.”

   “The new survey was conducted from July 20 to Aug. 9 among 10,548 U.S. adults.”

   “Half say they are mostly bad for home energy costs, up from 38%.”

   “And 49% say they are mostly bad for people's quality of life nearby, up from 30%.”

   “Since January, there have been increases of 9 percentage points in the shares of Americans who say data centers are mostly bad for local jobs (from 15% to 24%)”

   “Similar shares (between 21% and 24%) say data centers are mostly good and mostly bad for these things.”

6. FACT SHEET | FERC Directs Nation’s Largest Grid Operator to Create New Rules to Embrace Innovation and Protect Consumers
   Federal Energy Regulatory Commission · 2025-12-18
   Source excerpt

   “Today, FERC directed grid operator PJM to establish transparent rules to facilitate service of AI-driven data centers and other large loads co-located with generating facilities.”

7. 2025 State of the Market Report for PJM, Volume 1
   Monitoring Analytics, LLC (Independent Market Monitor for PJM) · 2026-03-12
   3 source excerpts

   “Inclusion of existing and forecast data center load in the peak load forecast for 2026 resulted in a $7,271,197,971 or an 82.1 percent increase in capacity market revenues for the 2026/2027 RPM Base Residual Auction.”

   “Inclusion of existing and forecast data center load growth resulted in a combined total increase in capacity market revenues for the 2025/2026 BRA, the 2026/2027 BRA, and the 2027/2028 BRA of $23,100,955,341.”

   “Data center load growth is the primary reason for recent and expected capacity market conditions, including total forecast load growth, the tight supply and demand balance, and high prices.”

8. AEP Ohio Proposal on Data Centers to Protect Ohio Consumers Adopted by PUCO
   AEP (utility press release) · 2025-07-09
   Source excerpt

   “large new data center customers to pay for a minimum of 85% of the energy they are subscribed to use – even if they actually use less – to cover the costs of infrastructure needed to bring electricity to those facilities.”

9. SCC approves Chesterfield gas plant and Dominion rate hike, creates new rate class for data centers
   Virginia Mercury · 2025-11-25
   Source excerpt

   “The newly-approved plan also creates a new rate class for high load customers that use over 25MW and a load factor of more than 75% monthly.”

10. Data Centers and Water Consumption
    Environmental and Energy Study Institute (EESI) · 2025-06-25
    2 source excerpts

    “Larger data centers can each 'drink' up to 5 million gallons per day, or about 1.8 billion annually, usage equivalent to a town of 10,000 to 50,000 people.”

    “A federal report estimated that the indirect water consumption footprint (from electricity use) of data centers in the United States was roughly 211 billion gallons in 2023.”

11. Data Centers and Water Fact Sheet
    Environmental Law Institute · 2026-01
    Source excerpt

    “Combines air cooling with open-loop water evaporation to cool air in the data center. Approximately 80% of water drawn is lost to evaporation and 20% is discharged.”

12. The environmental footprint of data centers in the United States
    Lawrence Berkeley National Laboratory (Environmental Research Letters) · 2021-05
    Source excerpt

    “nearly half of servers are fully or partially powered by power plants located within water stressed regions.”

13. Data Centers: Noise & Air Quality Concerns
    Loudoun County, Virginia · 2026
    2 source excerpts

    “Noise complaints, which residents may submit online, are among the most persistent issues brought forward to Loudoun County officials and frequently pertain to tonal noise.”

    “Broadly known as tonal noise, single frequency tones can be more aggravating to the human ear than broadband background noise at similar volumes.”

14. Data Centers in Virginia (Report 598)
    Joint Legislative Audit and Review Commission (JLARC), Virginia General Assembly · 2024-12
    6 source excerpts

    “Data centers emit low-frequency noise that is not loud enough to damage nearby residents' hearing and rarely loud enough to violate noise ordinances.”

    “The constant nature of data center noise has sometimes been a problem when data centers are located near residential areas.”

    “Although noise has been a problem for some data centers, a large majority of data centers do not generate noise complaints because of their location or design.”

    “Nearly all current data centers use 'Tier 2' diesel generators, which DEQ allows to run only in emergencies or as part of routine maintenance testing.”

    “in Northern Virginia, they make up less than 4 percent of regional emissions of nitrogen oxides”

    “In total, Virginia has over 63 million square feet of data center space on 7,200 acres of land.”

15. NAACP, others appeal xAI turbine permits for Memphis data center
    Tennessee Lookout · 2025-07-17
    2 source excerpts

    “The NAACP and another group are challenging the Shelby County Health Department's decision to grant xAI an air permit for 15 gas turbines at its South Memphis data center, according to an appeal filed Wednesday.”

    “The groups allege that the campus had up to 35 gas turbines on site capable of generating more than 420 megawatts of electricity before it sought permits.”

16. Shelby Co. Air Pollution Control Board denies appeal over xAI’s turbine use, citing ‘mootness’
    Action News 5 (WMC) · 2025-12-15
    Source excerpt

    “They doubled down on those concerns in front of the Memphis and Shelby County Air Pollution Control Board, which dismissed the appeal on the grounds of "mootness." The decision came down after a seven-hour meeting.”

17. Air Pollution and the Public Health Costs of AI
    California Institute of Technology · 2024-12
    Source excerpt

    “as many as 1,300 premature deaths per year by 2030 in the United States. Total public health costs from cancers, asthma, and other diseases, as well as from missed work and school days are approaching an estimated $20 billion per year.”

18. Prince William Digital Gateway data center project officially dies
    Virginia Business · 2026-07-06
    Source excerpt

    “After a legal battle that lasted more than two years, the controversial Prince William Digital Gateway, a proposed 23 million-square-foot data center complex planned on 2,100 acres near Manassas National Battlefield Park, is officially dead.”

19. Cloudy Data, Costly Deals: How Poorly States Disclose Data Center Subsidies
    Good Jobs First · 2025-11
    Source excerpt

    “In at least 36 states, those purchases are exempt from sales and use taxes under incentive laws specifically crafted for the industry.”

20. Data Center Subsidies Surge as States Lose Billions
    Good Jobs First · 2026-06-12
    Source excerpt

    “Virginia estimates nearly $2 billion in combined state and local revenue losses in FY 2025 from its sales and use tax exemption.”

21. Texas losing a billion dollars a year on data center tax break
    The Texas Tribune · 2026-04-08
    Source excerpt

    “Texas will lose out on $3.2 billion in sales tax revenue over the next two years thanks to an exemption for the state's booming data center industry, according to the comptroller's office.”

22. Data Centers in Virginia (Report Summary)
    Joint Legislative Audit and Review Commission (JLARC), Virginia General Assembly · 2024-12-09
    3 source excerpts

    “Data center jobs tend to be high paying. Several data center representatives indicated that a typical 250,000-square-foot data center may have approximately 50 full-time workers, about half of which are contract workers.”

    “Construction of an individual data center building usually takes about 12 to 18 months, and data center representatives indicated that, at the height of construction, approximately 1,500 workers are on site from various construction-related industries.”

    “Overall, the data center industry is estimated to contribute 74,000 jobs, $5.5 billion in labor income, and $9.1 billion in GDP to Virginia's economy annually. ... Most of these economic benefits derive from the construction phase rather than data centers' ongoing operations.”

23. Data Centers: Energy Issues & Considerations
    Loudoun County, Virginia · 2026
    Source excerpt

    “In northern Virginia, the regional power grid has become strained in large part due to increased electrical demand from data centers over the past 20 plus years.”

24. Energy and AI – Energy supply for AI
    International Energy Agency (IEA) · 2025-04
    Source excerpt

    “Natural gas is the largest source of additional supply, adding over 130 TWh of annual generation until 2030. Renewables are the second-largest source of additional electricity supply, adding 110 TWh to the data centre electricity supply between 2024 and 2030.”

25. Energy and AI – Executive Summary
    International Energy Agency (IEA) · 2025-04
    2 source excerpts

    “Emissions from electricity use by data centres grows from 180 million tonnes (Mt) today to 300 Mt in the Base Case by 2035, and up to 500 Mt in the Lift-Off Case.”

    “While these emissions remain below 1.5% of the total energy sector emissions in this period, data centres are among the fastest growing sources of emissions.”

26. Data Center Industry Tax Revenue Report 2024
    Prince William County, Virginia · 2025-06
    Source excerpt

    “Data centers are a cornerstone of Prince William County's commercial tax base, generating $293.7 million in total tax revenue in TY 2024, an increase of 77% over the prior year.”

Each source was opened and checked against the excerpt shown. Company statements are identified as such. Figures are as published; where sources differ, each is shown.