As data centers prioritize cleaner power, major tech firms are landing in what might seem like unlikely locations.

Over the past few years, Google and Facebook have nestled into cities in the Tennessee Valley at ideal sites for data center development. In August, Facebook announced plans to build an $800M, 1M SF data center in Gallatin, Tennessee; Google built a $600M data center in nearby Clarksville, which opened late last year, along with another similarly sized data center in Bridgeport, Alabama. Facebook also maintains a data center in Hunstville, Alabama.

Along with other data centers in the Tennessee Valley, these hyperscale sites share one thing in common: They derive power from the Tennessee Valley Authority, much of it specifically from nearby solar farms. The tech giants also found a willing regional partner in their goals to power their operations using only renewables.

“TVA’s ability to arrange for a solar farm to be erected was critical; if they hadn’t done that, [Facebook] wouldn’t have landed here,” said James Fenton, executive director of the Gallatin Economic Development Agency. “The city wanted tech, and we happened to have the land.”

In November, the TVA, a federally owned utility that supplies power to the greater Tennessee Valley region, announced that it is building two 100 megawatt solar farms to support the two Google data centers, as well as another data center at Vanderbilt University in Nashville. Facebook’s Gallatin site relies partly on new solar projects in Lincoln and Madison counties, developed in partnership with the TVA. Along with other hyperscalers, Facebook has set aggressive renewable energy goals and aims to power its global operations through 100% renewables by the end of 2020.

“Access to renewable energy is a key part of our data center site selection process. We work closely with local stakeholders to find new projects that are on the same electric grid as the data centers they support,” Facebook spokesperson Melanie Roe said. “In this case, we had already worked with the Tennessee Valley Authority to find renewable energy projects to support our data center in Huntsville, so we knew we would be able to do the same for our Gallatin data center.”

Given its proximity to coal-producing areas, the Tennessee Valley may not be the first place that comes to mind as a solar development hub. But incentives are lining up for continued solar development in the area — and data center builders bring major clout to the table.

“We’ve definitely seen, and not just in Tennessee, that the large data center operators are driving the solar agenda,” said Bryan Jacob, solar program director at the Southern Alliance for Clean Energy.

At a recent shareholder conference, Tag Greason, chief hyperscale officer at colocation giant QTS Realty Trust, said he’d seen a rapid evolution in the bargaining power of hyperscalers when it comes to renewable energy.

“In a five-year period, you’ve seen an interest [in renewables], to a demand that I go with the hyperscaler and say to the power company: 'You guys need to figure out your power mix and regeneration, and I’m also not going to pay a premium. And if you can’t figure it out, I’m going to a state that has,'” Greason said.

SACE notes that 2018 was a “banner year” for corporate leadership on solar, with Facebook driving major solar commitments in Georgia (203 MW), Alabama (227 MW) and Tennessee (150 MW). In that year, Google also announced projects in Tennessee and Alabama (150 MW each) and teamed up with other corporations for an additional 177 MW contract with Georgia Power. As of 2019, Google and Amazon were responsible for the majority of solar development in the Tennessee Valley, according to SACE.

The TVA is one of several utilities in the Southeast with a growing solar portfolio. But as the largest federally owned utility in the U.S., it occupies a unique position in the renewable energy sector — and the potential for data center growth in the region it serves.

Although it doesn’t have a profit motive, part of its official mission is to foster economic growth. That helps to explain its responsiveness to major companies, Jacob added, although he noted that despite the high-profile tech deals, the TVA still lags well behind other regional utilities in its plans for solar energy development.

That may change in a Biden administration, with the president-elect signaling ambitious clean energy plans, including a goal of decarbonizing the power sector by 2035. Given its status as a  public power company, Biden also has the authority to make appointments to the TVA and other federally owned utilities.

For now, communities in the Tennessee Valley are reaping the benefits of data center growth.

In Gallatin, that translates into not just a jobs boom — the Facebook site will support an estimated 1,200 jobs in the construction process alone — but perks like the tech giant’s financial help in upgrading roads and other infrastructure. Fenton expects that other development will follow in Gallatin.

“The number of phone calls I’m getting, for retail, hotel, all kinds of development, we almost can’t keep up with it. It’s really amazing,” Fenton said.