While artificial intelligence has become an integral component to many industries across the country, the energy needed to power the technology has come at a great cost. In Chicago, the recent boom in data center development has caused electricity costs to soar.
What's happening?
As one of the largest cities in the United States, Chicago has long been known as a central hub for various industries throughout the years. And as we continue into the new era of widespread AI, the Chicago area has become a crucial location for the construction of data centers to power that AI. But this has resulted in a rapid spike in electricity costs around the city.
Fox 32 in Chicago noted that ComEd customers are now paying an additional $0.10 per kilowatt-hour. While there may be many factors that contribute to this increase, a large reason can be traced to the growing number of data centers in Chicago. According to a report from Monitoring Analytics, data centers are at the heart of the increased energy demand.
"The basic conclusion of this analysis is that 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," read the report.
The independent market research firm compiled a detailed analysis for PJM Interconnection, a regional organization that manages the electricity grid and wholesale electricity markets in a large region of the eastern United States, including Chicago.
Why is this analysis important?
While power supply demands often increase as populations expand and industries grow, the report from Monitoring Analytics noted that this recent spike in electricity costs is something that has not been seen before.
"The growth in data center load and the expected future growth in data center load are unique and unprecedented and uncertain and require a different approach than simply asserting that it is just supply and demand," added the report.
While efforts are underway to make AI more energy-efficient, AI models generally require a significant amount of energy, primarily due to the energy-intensive nature of training and running complex algorithms in data centers. Many experts suggest that AI could account for an increasing percentage of global energy consumption in the future. As seen in Chicago, this can negatively impact electricity grids and resource usage.
With an estimated 163 data centers in the Chicago area, the rapid expansion of AI may bring forth thousands of new jobs, positively impacting the local economy. Its long-term impact on the energy supply has yet to be determined. In a December 2024 press release, former U.S. energy secretary Jennifer M. Granholm spoke about this concern.
"The United States has seen an incredible investment in artificial intelligence and other breakthrough technologies over the last decade and a half, and this industrial renaissance has created greater demand on our domestic energy supply," Granholm said. "We can meet this growth with clean energy."
What can be done about rising electricity costs?
Although it remains to be seen whether power companies can keep up with the power demand of AI data centers, there is hope for homeowners to keep their monthly electricity bills down. Solar power can significantly save money by reducing or eliminating the reliance on the traditional electric grid, leading to lower monthly utility bills.
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Always 👍 Homeowners can even protect themselves from the potential headache of rising energy prices by locking in a fixed electricity cost with solar. Installing solar panels can also go a long way in reducing air and water pollution and decreasing heat-trapping gas pollution by lowering the need for dirty fuels.
The upfront costs of solar panels can often be a little too far out of many homeowners' budgets. That is why leasing solar panels can be an attractive option. Companies like Palmetto can help you access all of the benefits while avoiding the steep upfront costs.
By checking out Palmetto's LightReach program, you can explore which solar panels may be right for you. Leasing can help homeowners minimize upfront costs and even find plans for no money down.
However, if leasing isn't right for you, EnergySage has free tools to get estimates on purchasing and installing panels, making it easy to compare quotes from trusted installers. If you're still on the fence regarding the decision to lease or purchase solar panels, you can check out this pros and cons list that can make that choice a lot easier.
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