Santa Clara is home to one of the largest data center clusters on the West Coast. These facilities support everything from cloud services, online retail, AI, banking, and global communications. Their presence has helped shape the region’s innovative economy and reinforces Santa Clara’s role as a technology hub.

Data centers choose Santa Clara for several reasons:

• Reliable, affordable electricity - Silicon Valley Power (SVP) offers some of the lowest rates in the state.
• Strong infrastructure
• Proximity to tech companies - Being close to customers and partners reduces latency and supports fast service delivery.
• Business-friendly environment - The City works closely with data center developers on planning, permitting, and infrastructure needs.

Today, Santa Clara hosts more than 50 data centers, contributing to local revenue, job creation, and the City’s economic stability.

Why Data Centers Matter

Data centers play a major role in everyday life, even if you never see them.

They:

• Support cloud storage, online gaming, streaming, and e-commerce
• Power AI and machine learning technologies
• Protect and manage business and data
• Enable secure financial transactions
• Support critical services, from hospitals to public safety
• Generate revenue that helps fund City services – 53% power use and sales are from Data Centers

Data centers also partner with Silicon Valley Power to invest in efficiency programs, renewable energy, and grid reliability.

Sustainability and Energy Use

Because data centers require significant power, Santa Clara places a strong emphasis on: 

• Energy-efficient equipment
• Cooling innovations (liquid cooling, etc.)
• Green building standards
• Reducing greenhouse gas emissions
• Using more renewable and carbon-free energy sources

SVP provides electricity from carbon-free or renewable energy sources and energy-efficiency incentives to help data centers lower their environmental impact.

Frequently Asked Questions

What is a data center?

A data center is a secure facility that stores, processes, and manages large amounts of digital information. Servers inside data centers support cloud computing, online platforms, AI tools, and other digital services used every day.

Why does Santa Clara have so many data centers?

Several advantages bring data centers to Santa Clara:

• Low and stable electric rates from Silicon Valley Power
• Reliable, redundant electric systems
• Access to fiber infrastructure
• Proximity to Silicon Valley’s largest businesses and tech companies
• Streamlined permitting processes and development support from the City

Do data centers benefit the community?

Yes. Data centers:

• Contribute significant revenue to the City
• Support local jobs (both permanent and through ongoing construction)
• Strengthen Santa Clara’s high-tech economy

Do data centers increase energy use?

Data centers use substantial energy, but they also operate with highly efficient technologies. In Santa Clara, most data centers participate in energy-saving programs and use carbon-free or renewable electricity from Silicon Valley Power. SVP’s focus on system upgrades ensures the grid can support large users while maintaining reliability for residents and businesses.

Are data centers noisy or disruptive?

Data centers are generally quiet and operate indoors. Some facilities use backup generators for emergency power, but these are tested infrequently and are subject to strict noise and air-quality regulations.

Do data centers affect residents’ electric rates?

Large customers like data centers help stabilize costs because they provide steady, predictable energy demand. This consistent load helps SVP plan infrastructure more efficiently and maintain some of the lowest electric rates in California.

Why Can’t Data Centers Pay More to Lower Residents’ Electric Rates?

Utilities in California must follow strict “cost-of-service” rules, which require each customer group (residential, commercial, industrial, and data centers) to pay rates based on the actual cost to serve them. State law doesn’t allow us to overcharge one group in order to subsidize another.

Even within those rules, data centers already help keep rates low for everyone by providing a steady, 24/7 load that spreads fixed system costs across more usage. But charging them extra to artificially reduce residential bills would put the utility at financial risk and could drive large customers away, ultimately leading to higher, not lower, rates for the community.

Maintaining fair, cost-based rates ensures long-term stability, high reliability, and some of the lowest electric rates in California.

What is the City doing to ensure data centers are sustainable?

The City and SVP work with data centers on:

• Increasing energy efficiency
• Reducing greenhouse gas emissions
• Meeting building and environmental standards
• Managing long-term infrastructure responsibly

Santa Clara also evaluates new data center proposals carefully to ensure they align with the City’s growth plans and sustainability goals.

Are new data centers still being built in Santa Clara?

Santa Clara continues to evaluate new data center projects based on available land, infrastructure capacity, and alignment with the City’s economic and sustainability priorities. Not all proposals are approved, and each project goes through a detailed review through a streamlined environmental and permitting process.

How do data centers impact the electric grid?

Data centers require reliable power 24/7. SVP works closely with them to:

• Plan system upgrades 
• Manage load growth
• Build redundancy
• Ensure reliability for all customers

This collaborative planning helps ensure that residential and business customers continue to receive reliable service.

Do data centers use water?

Some cooling systems require water, while others use air or hybrid solutions. Santa Clara encourages efficient cooling technologies, and all facilities must comply with local water-use regulations and conservation practices.