Insight and analysis on the data center space from industry thought leaders.

5 Tips on Choosing Better Sites for Data Centers

Choosing a site for your data center can be daunting. These five tips will help you improve efficiency while maximizing incentives.

data center city

As the need for new data centers grows, so does the industry. All that economic activity means that any company looking for a site to build on has their work cut out for them as offers, incentives, and enticements come in from all directions.

But in my role as the economic development director for Wabash Valley Power Alliance, I’ve learned what really matters when choosing a site for your data center. Here are five tips that can help you find the best location to build.

Tip 1: Choose a state that offers tax incentives for data centers.

As data centers proliferate across the country, states are working hard to make themselves more attractive to site selectors. One of the best ways to use this to your advantage is to find states that offer tax breaks and other incentives. For example, Indiana and Illinois have passed legislation this year specifically aimed at rewarding data centers for building in their borders. When state governments compete for business, you’re the one who wins.

Tip 2: Maximize incentives through energy efficiency rebates.

Tax breaks aren’t the only incentives available for data centers. Energy companies are increasingly offering rebates and incentives for energy efficiency to attract new building projects. In some cases, these rebate programs can be customized to suit your particular needs, rather than forcing your project to conform to “cookie cutter” specifications. When you’re choosing a site for your data center, make sure it’s served by a power company that offers flexible options for energy efficiency rebates.

Tip 3: Look for Renewable Energy Credits to achieve carbon neutrality.

Carbon neutrality is a laudable goal, and one that the data center industry is focused on. Getting there, however, is easier said than done. That’s what makes Renewable Energy Credits (RECs) so valuable. These energy commodities represent real green energy, and can be used toward your renewable energy goals. As you think about selecting your site, be sure to ask the local power company whether they offer RECs as part of a renewable energy package.

Tip 4: Know the tell-tale signs of reliability.

Data centers need reliable power. It’s not up for debate. But how can you tell that an energy company offers the necessary reliability? First, look for a company that specializes in both generation and transmission, to ensure they understand the importance of each. Next, ask about their operations center—do they have one on site to identify problems immediately and resolve them? Finally, make sure to ask about their infrastructure and relationships—are they working with peers across the grid to ensure reliability and security alike?

Tip 5: Consider a non-profit power company to get the best service.

Rural electric cooperatives are the great secret of the Midwest. These non-profit power companies are member owned, meaning they aren’t out to make a buck for investors. That results in decisions designed to save you money, from offering market pass through rates on energy to “member first” attitudes toward customer service. When you’re deciding where to build, a non-profit power company can be a great partner to have.

These are just a few tips to keep in mind as you’re searching for sites. As the data center industry grows, many people will compete for your business. Don’t be afraid to use that to your advantage. Learn more at

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