Rising energy prices are putting artificial intelligence and data centers in the crosshairs

As technology companies tout their plans for massive new data centers, consumers are increasingly concerned that an AI-driven gold rush will eventually drive up the price they pay for electricity, according to a new study.

The report, commissioned by solar installer Sunrun, found that 80% of consumers are concerned about the impact of data centers on their utility bills.

Consumer concerns are not unfounded.

U.S. electricity demand has remained flat for more than a decade, according to the U.S. Energy Information Administration (EIA). Over the past five years, business users, including data centers and industrial users, have begun drinking deeper from the network, with annual growth rising at 2.6% and 2.1%, respectively. Meanwhile, residential use grew just 0.7% annually.

Data centers today consume about 4% of the electricity generated in the United States, more than double their share in 2018. By 2028, consumption is expected to rise to 6.7% to 12%, according to Lawrence Berkeley National Laboratory.

Generation has been able to meet demand thanks to an increase in new capacity from grid-scale solar, wind and battery storage. Big tech companies have been closing big deals for new utility-scale solar, in particular, because of the energy source’s low cost, modularity, and speed of getting power. Solar farms can begin delivering power to data centers before they are completed, and a new project typically takes about 18 months to complete.

The EIA expects renewable energy sources to dominate new generation capacity for at least the next year. This trend will likely extend beyond 2026, but experts predict that Republican repeal of key parts of the inflation-reducing law will hinder the growth of renewables.

Meanwhile, natural gas, another energy source favored by data center operators, has not met the moment. Production was rising, but most new supplies went toward feeding exports rather than the domestic market. Consumption of electricity generators increased by 20% between 2019 and 2024, while exporters consumed 140% more.

New natural gas power plants won’t be ready in time either, taking about four years to complete, according to the International Energy Agency. The backlog of turbines used in gas-fired power plants has exacerbated the problem. Manufacturers are setting delivery dates of up to seven years, and newly announced production capacity is unlikely to change things.

Slow natural gas buildouts combined with sluggish renewable energy sources have put data center developers in a bind.

While AI and data centers are not entirely responsible for the surge in electricity demand — industrial users have been nearly as power-hungry — they have been making headlines.

Artificial intelligence is likely to be the focus of consumer ire: More people are interested in the technology than are enthusiastic about it, according to a Pew poll. It’s no surprise that many employers use this tool as a way to cut headcount rather than improve employee productivity.

Add high energy prices to the mix, and you can begin to see how a backlash could occur.