Enertech Blog

When a data center in need of a new home calls on your community, will you cheer and roll out the welcome mat? 

Community leaders nationwide labor over this question. On the one hand, they welcome the prospect of more jobs and increased tax revenues that data centers bring. On the other hand, the huge demand these centers place on the power grid can drive the cost of electricity up for everyone. Homeowners, small businesses, schools, libraries, and hospitals often end up paying more. 

Daily news reports remind us that the data center train has already left the station. One database that tracks their development lists more than 1,000 projects underway in the U.S. alone.¹ The Harvard Gazette says 3,000 projects “blanketing the country” are either planned or under construction.² 

Communities that welcome data centers anticipate an uptick in employment associated with construction, hospitality services, and business and professional services. Still, this development comes at a time when electricity users already pay 22% more for energy than what they paid five years ago.³ Welcoming a data center remains a tough decision, but there’s good news: Geothermal heat pumps are now opening doors to affordability, reliability, and grid relief in tandem with data centers.

Data Center Development: No Longer Just An Urban Affair 

The decision to host a data center is no longer limited to urban communities, says Allison Hamilton, director of business and technology strategies at the National Rural Electric Cooperative Association (NRECA). While urban areas are now home to 87% of existing data centers, 67% of planned data centers will go in rural areas. These communities often offer developers tax and economic incentives, lower land costs, and the potential for lower energy costs. They also offer more space for scalability. 

“Sometimes these data centers start with one building and then grow to a multi-building campus,” says Hamilton. 

The lower population density in rural areas means fewer persons objecting to the way buildings look, or the noise operations generate. 

But while a data center might boost a rural community’s economy, it can double or triple its energy demands. Hamilton calls the scenario “daunting” for small electric cooperatives whose “number one priority is protecting their members.” Affordability and reliable delivery remain top concerns.⁴ 

Building more power plants to meet the demand may seem the obvious solution, but that takes time. Many communities need relief sooner rather than later. 

“We are seeing the new generation supplies in a real big crunch right now, not to mention the ability to site and permit new transmission and distribution equipment,” says Ryan Dougherty, executive director at Geothermal Exchange Organization (GEO). “It’s a tricky situation.” 

He says that today’s hyperscalers, grid managers, and utility executives are eager to explore ways that put more demand on the grid without substantially scaling generation: “There is significant interest in the potential for geothermal to meet this moment and deliver savings and increased capacity to the electric grid.”⁵

Geothermal Systems Free Up Electricity

Geothermal heat pumps are among the most durable and reliable HVAC solutions available in today’s market. They exchange heat with the earth making them more efficient than both legacy options and air-source heat pumps. Co-ops that opt for geothermal HVAC help communities realize: 

• Reduced peak demand and lower wholesale demand charges. 
• More time to implement infrastructure capacity upgrades and transformer replacements, smoothing out costs over time. 
• Reduced energy loss across long transmission lines. 

Dougherty says models show how, in just ten years, geothermal can significantly decrease pressure on the electric grid “to the tune of over 62 gigawatts . . . equal to or greater than all of the solar panels we have ever installed on tops of buildings in the United States.” 

His recent audiences find it compelling. Industry experts like those at the National Association of Regulatory Utility Commissioners and the American Council on Energy Efficient Economies want to learn more. 

“It’s clear that there is significant interest in the potential for geothermal to meet this moment and deliver savings and increased capacity to the electric grid,” he says. 

Geothermal Helps Manage Peak Demands, Key To Immediate Grid Relief

Energy policy expert Scott Segal (partner at Bracewell, LLP) believes a useful question for co-ops and others to ask now is this: “How do we serve some very large loads without letting their peaks dictate the cost of the entire power system?”⁶ 

He urges a shift in focus from power generation that covers every demand, to smart management of resources. 

He says networks of ground source heat pumps can help rural electric cooperatives meet summer and winter peak needs. They can relieve other loads and lessen “systemic shock” at peak load times. He calls geothermal HVAC “a peak management resource strategy.” The good news? It’s employable right now as we await time-consuming construction of more data centers. 

Segal advises that we embrace “no-regret” technologies like geothermal. He contends that data centers must demonstrate that they pay their own way. Their arrival must benefit existing customers. Geothermal heat pump technology is perfect for this message, he says: 

“It benefits the existing consumer. The consumer feels heard because their concern is [that] their power bills will go up . . . what better way to demonstrate that is not the case than by making more efficient technologies available to them.”

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¹Jillian Bommarito and Michael James Bommarito, Data Center Policy across the 50 States: A Survey of Incentives, Land Use, and Energy Regulation, Server Country, June 18, 2026, Server Country Project Database 

²Harvard Gazette, “Why Are Communities Pushing Back against Data Centers?,” April 9, 2026, https://news.harvard.edu/gazette/story/2026/04/why-are-communities-pushing-back-against-data-centers/ 

³U.S. Chamber of Commerce, “Your Electric Bill Is Going Up, but Where You Live Decides How Much,” U.S. Chamber of Commerce, [date], https://www.uschamber.com/energy/your-electric-bill-is-going-up-but-where-you-live-decides-how-much 

⁴Allison Hamilton, remarks in “Mission Geo Webinar: Managing Peaks & Power Costs in the Age of AI,” International Ground Source Heat Pump Association webinar, September 1, 2026. https://missiongeo.org/multimedia/managing-peaks-power-costs-in-the-age-of-ai/

⁵Ryan Dougherty, remarks in “Mission Geo Webinar: Managing Peaks & Power Costs in the Age of AI,” International Ground Source Heat Pump Association webinar, September 1, 2026. https://missiongeo.org/multimedia/managing-peaks-power-costs-in-the-age-of-ai/

⁶Scott Segal, remarks in “Mission Geo Webinar: Managing Peaks & Power Costs in the Age of AI,” International Ground Source Heat Pump Association webinar, September 1, 2026. https://missiongeo.org/multimedia/managing-peaks-power-costs-in-the-age-of-ai/