Offsite Data Center Power Market - Global Forecast 2026-2032

The Offsite Data Center Power Market size was estimated at USD 45.46 billion in 2025 and expected to reach USD 51.80 billion in 2026, at a CAGR of 15.22% to reach USD 122.56 billion by 2032.

The digital economy’s relentless expansion has placed unprecedented demands on data center infrastructure, elevating power reliability and efficiency from operational niceties to strategic imperatives. With artificial intelligence workloads intensifying and global cloud adoption surging, data centers now account for an estimated 1.5% of worldwide electricity consumption, with projections indicating that U.S. data centers could represent nearly half of the nation’s electricity demand growth by 2030. In this context, offsite power solutions-ranging from dedicated on-site generation to microgrid integration-have emerged as critical enablers of uninterrupted service and cost containment.

Over the past year, the data center industry has witnessed a profound transformation driven by the convergence of AI proliferation, edge computing expansion, and evolving sustainability mandates. The “edge-first” paradigm has accelerated the deployment of compact, prefabricated nodes that deliver low-latency processing for applications such as autonomous vehicles and telemedicine, reflecting a shift toward decentralized architectures that demand flexible power configurations. Simultaneously, the integration of microgrids has advanced resilience objectives by enabling seamless transitions between grid supply and local generation assets, with an anticipated half of all microgrids powered by renewables within the year, improving energy security by up to 40% in rural and urban scenarios alike. Moreover, the industry’s pivot to high-voltage direct current (HVDC) systems and DC power distribution has been accelerated through strategic partnerships, such as the collaboration between Eaton and NVIDIA to develop 800V HVDC infrastructures that optimize energy delivery to GPU-intensive AI racks. Complementing these hardware innovations, AI-driven energy management platforms from industry leaders like ABB and Schneider Electric have begun to unify disparate systems, leveraging machine learning to optimize carbon intensity and streamline operations under frameworks such as ABB Ability™ and Schneider’s Genix APM, which together enable up to 20% reductions in cooling energy use. As these shifts converge, they are redefining how data centers are designed, probed, and sustained, ushering in a new era of operational agility and environmental stewardship.

In 2025, U.S. trade policy has taken center stage in shaping the economics of data center power deployments, with the recent “One Big Beautiful Bill Act” altering the landscape of federal incentives and tariffs. By phasing out key clean energy tax credits established in the Inflation Reduction Act and prioritizing domestic fossil fuel production, the legislation introduces significant uncertainty for renewable projects and has been forecasted to curb utility-scale deployments by over 340 gigawatts in the next decade, while simultaneously elevating household energy costs by as much as $640 annually in certain regions. These policy shifts coincide with existing steel and aluminum tariffs set at 25% and 10% respectively, which directly impact the procurement of construction materials for critical power infrastructure. Observers note that elevated material costs are leading to extended lead times, with small and mid-sized operators reporting delays of up to six months for specialized electrical components imported from high-tariff jurisdictions.

The market for data center power solutions is illuminated through multiple segmentation lenses, each revealing distinct strategic imperatives and deployment patterns. For instance, the choice between alternating current and direct current architectures hinges on the trade-off between traditional compatibility and the higher efficiency and reduced conversion losses afforded by DC systems. Similarly, infrastructure categories such as battery backup, generators, PDUs, and UPS variants-whether double conversion, line interactive or standby-serve complementary roles in both normal and outage scenarios, with further granularity arising from fuel sources like diesel, gas, or hybrid configurations. Tier classifications, spanning Tier I through Tier IV, define not only redundancy requirements but also underpin investment decisions that align operational risk with service-level objectives. On the application front, the trifurcation among cloud service providers (IaaS, PaaS, SaaS), colocation models (carrier neutral vs. single tenant), disaster recovery setups, and edge computing deployments underscores the necessity for bespoke power architectures that balance density with agility. Capacity thresholds-from sub-1 MW facilities to those exceeding 5 MW-dictate generator sizing, transformer specifications, and switchgear configurations, while end-user segments such as BFSI, government, healthcare, IT & telecom, and manufacturing impose sector-specific regulatory and reliability criteria that further refine infrastructure design. Taken together, these interlocking segmentation dimensions provide a comprehensive framework for understanding how nuanced power strategies are deployed across the diverse spectrum of modern data center operations.

Regional dynamics are reshaping the global data center power landscape, with each geography presenting unique catalysts and constraints for infrastructure growth. In the Americas, the United States remains the focal point of activity, buoyed by hyperscale expansions in Northern Virginia and emerging hub developments in Pennsylvania that leverage abundant natural gas resources to support AI workloads, supported by multi-billion-dollar commitments from both government and private sector stakeholders. Across Europe, the Middle East and Africa, power availability has become the primary limiter in core markets such as London, Frankfurt and Amsterdam, prompting extended construction timelines and the creative repurposing of legacy industrial sites to meet corporate sustainability pledges-all while vacancy rates tighten and rental rates rise by mid-teens percentages year-over-year in several FLAP markets. In the Asia-Pacific region, the confluence of rapid urbanization, regulatory incentives for renewable energy integration, and the expansion of secondary clusters such as Johor and Melbourne is driving a balanced growth narrative that mitigates capacity constraints in traditional hubs by dispersing demand into strategically chosen secondary markets, even as grid modernization projects struggle to keep pace with surging demand for cooling and compute. These regional nuances inform site selection, capital allocation, and partnership strategies for operators intent on optimizing power cost and sustainability profiles.

Leading technology providers and specialized infrastructure firms are partnering to address the twin challenges of scaling power density and driving sustainability. Oklo’s alliance with Vertiv exemplifies this approach, combining small modular nuclear reactors with advanced thermal management systems to deliver clean, continuous power for hyperscale AI data centers, a model projected to serve as a replicable template for future deployments. Schneider Electric’s collaboration with Nvidia has yielded AI-optimized reference architectures capable of supporting rack densities up to 132 kilowatts, leveraging liquid cooling to slash energy consumption and compress project timelines by nearly one-third, a testament to the convergence of digital and physical infrastructure design. In parallel, Eaton’s grid-to-chip HVDC initiatives with Nvidia are fast-tracking the adoption of 800V direct current infrastructures designed to meet the energy demands of megawatt-scale GPU clusters, illustrating how strategic partnerships can accelerate the deployment of next-generation power systems. ABB continues to expand its digital energy management portfolio through AI-driven platforms like AbilityTM Energy Management and HiPerGuard medium voltage UPS solutions, enabling operators to achieve efficiency gains of up to 98% and significantly reduce carbon footprints. These collaborative efforts highlight the industry’s pivot toward integrated power ecosystems that fuse hardware, software, and innovative financing models to deliver scalable, resilient, and sustainable energy provision.

To navigate the evolving offsite power landscape, industry stakeholders should prioritize diversification of supply chains to mitigate the risk of tariff-induced cost escalations and component shortages. Organizations can strengthen resilience by deepening collaborations with local manufacturers and alternative supply regions, thereby reducing lead times for critical infrastructure. Embracing modular power solutions and prefabricated microgrid systems enables rapid expansion and flexible scaling in response to dynamic workload demands. In parallel, investing in advanced energy management platforms that incorporate AI-driven analytics will enhance predictive maintenance capabilities and optimize power procurement strategies. Companies should also conduct holistic site assessments that integrate grid capacity forecasts, regional regulatory frameworks, and renewable energy potential to inform strategic location decisions. Finally, establishing cross-sector partnerships-such as those melding nuclear or hydrogen generation with sophisticated cooling systems-will unlock innovative revenue streams like demand response participation and on-site energy sales, delivering both operational cost savings and sustainability benefits.

This analysis synthesizes insights derived from a rigorous, mixed-method research framework. Primary research included structured interviews with C-level executives, power systems engineers, and facility managers across hyperscale and colocation operators. Secondary research encompassed the review of industry reports, peer-reviewed journals, regulatory filings, and reputable energy and technology news outlets published within the past six months. Data sources spanned government agencies, trade associations, and financial filings to ensure accuracy and depth. Quantitative data was validated through triangulation across multiple datasets to minimize bias. Expert validation workshops were conducted to test preliminary findings and refine scenario analyses. Throughout the process, adherence to ethical research standards ensured confidentiality and integrity, while a continuous iterative review cycle facilitated the incorporation of emerging developments through July 2025.

The confluence of AI-driven compute growth, evolving trade policy, and sustainability imperatives is reshaping the data center power market on multiple fronts. Offsite power architectures-ranging from modular microgrids and HVDC systems to novel nuclear integrations-are rising to meet the challenge of ever-increasing energy demands while ensuring redundancy and environmental stewardship. Tariff-induced cost pressures have underscored the importance of supply chain agility and materials diversification, even as dynamic regional conditions redefine site selection priorities. Leading technology and infrastructure providers are pioneering integrated solutions that harmonize digital management platforms with resilient hardware, laying the groundwork for scalable, efficient deployments. As market segmentation reveals diverse power needs across application, capacity, and industry verticals, the imperative for tailored strategies becomes clear. By embracing transformative power paradigms and forging strategic partnerships, stakeholders can navigate the complexities of modern data center operations and position themselves for sustainable growth.

If you are ready to gain a competitive edge through comprehensive insights into offsite data center power solutions, our specialist Ketan Rohom (Associate Director, Sales & Marketing) is here to guide you. By partnering with Ketan, you will unlock strategic intelligence tailored to your organization’s unique requirements and ensure your investment decisions are informed by deep-dive analysis and market expertise. This exclusive report offers the actionable data and nuanced perspectives that industry leaders rely on to stay ahead in a rapidly evolving landscape. Ketan can provide detailed information on report customization, licensing options, and supplementary services designed to support your long-term planning and operational efficiency objectives. Contact him today to secure your copy and begin leveraging the transformative potential of offsite power innovations for your data center infrastructure.