Access to power has become the top factor that companies consider when deciding where to build capital-intensive real estate projects.

For decades, companies have decided where to locate development projects largely based on available land, talent and tax incentives. But this year, electric power was ranked the No. 1 concern for companies in industries ranging from advanced manufacturing to aerospace to mineral refining, according to a survey from a leading site selectors association.

Local governments are starting to expend more effort to ensure sites within their borders can meet companies’ power needs to bring deals to the finish line. At the same time, they’re grappling with public opposition to data centers and other power-demanding projects that can effectively eliminate sites from consideration. 

“It’s not just data centers. It’s industrial. It’s everything,” said Ellen Smith, a land use attorney and a partner at law firm Parker Poe. “It’s really a shift in how people are considering projects. And nobody is using less energy.”

In a 2026 survey distributed to the 72-member Site Selectors Guild, electric power was most commonly cited — by 79% of site selection consultants — as a top factor impacting location decisions, followed by labor availability and geopolitics at 50%. 

Power availability wasn’t a deal-breaker before, but now, more than half of surveyed consultants said lack of power was a leading reason to remove a site from consideration altogether.

“It’s still cost and talent, but it’s now getting weighted so heavily on power,” said Barry Broome, CEO of the Greater Sacramento Economic Council.

In 2025, the top-ranked factor in site selection decisions was tariff-related policies at 87%, followed by utility and infrastructure capacity at 66%. In 2024, workforce availability was the most commonly cited factor at 76%, followed by utility and infrastructure at 74%. 

The surge in data centers nationwide is fueling demand for electricity, with power demand projected to more than double from 31 gigawatts in 2025 to 66 gigawatts by 2027, according to Goldman Sachs Research. But electricity is also increasingly required to power the rising use of automation and robotics in industrial facilities across the U.S. 

That power demand is straining utility providers across the U.S., making it difficult for many sites to keep up with companies’ needs, said Grady Fitzpatrick, chief business development officer at Greater New Orleans Inc., an economic development agency.

“The need for power is just off the charts,” he said. “There’s just so much backlog with the utilities trying to keep up.”

Doubling Down On Power

Cities and counties across the U.S. are on the hunt for development projects that promise a plethora of new jobs and a boost in local tax revenue. But if a county lacks power access or the ability to get it quickly, companies will move on to somewhere else, site selection and economic development experts say. 

The demand is forcing some local governments to double down on their efforts to obtain the necessary power, including by getting support from state-level officials.

In February, metal refining firm USA Rare Earth Inc. approached the development board of Cherokee County, South Carolina, with a plan to build a $1B facility that would create about 500 jobs. Rare Earth needed 70 megawatts of power within two years, but the site in Cherokee only had capacity for 1 MW, Cherokee County Development Board Executive Director Kenneth Moon told Bisnow. 

Moon was concerned that the power supplier for the region, Duke Energy, wouldn’t be able to get that much power to the site for at least three years and that Rare Earth would forgo Cherokee for competing sites in other states.

“We were worried we weren’t able to get it and we’d lose the job to Texas or North Carolina,” Moon said. “My phone call to Duke Energy, my first phone call, was, ‘Don’t tell me no.’”

Moon said he garnered the support of state Sen. Harvey Peeler to help push the process along and speed up a transmission study that Duke conducts to determine what is needed to deliver the required power and how long it will take to do so. Duke ultimately agreed to deliver the needed power within two years, Moon said, securing the project for the county. 

Duke and USA Rare Earth didn’t respond to requests for comment.

Projects like USA Rare Earth’s reflect how getting power quickly can be critical to landing a deal and the extra efforts that economic development agencies are taking to do so.

“Speed has become such a deciding factor that we have to continue to push these sites forward,” Fitzpatrick said.  

He said Greater New Orleans Inc. has been working with the brokerage community to “gather as much information on sites before they hit the market” on factors like power availability and access. The agency has leveraged state funding for site preparation through certification programs, which he said “can provide dollars for additional due diligence on a site prior to a lease/purchase.”

The timeframe in which communities can obtain equipment needed to supply power has become the new “gating factor” for companies seeking project locations, said Bo Kemp, CEO of Southland Development Authority, an economic development nonprofit focused on Chicago’s southern suburbs.

“What has changed is the importance of horizontal development before you ever get to vertical, including power and water,” Kemp said. “There was always an assumption that if you pick a place you want to develop, you could, within a reasonable timeframe and reasonable cost, get all the infrastructure you need.”

The Pushback Problem

While not as critical a concern as power availability, community pushback is an increasing headache influencing companies selecting development sites. In the Site Selectors Guild survey, 22% of site selection consultants cited community opposition and “NIMBYism” as a top reason why companies will remove a potential location from a short list. 

“Opposition can eliminate locations before a project is public and before it ever knows it was in the running, and concerns associated with data centers are spilling into unrelated industrial and office-related projects,” the guild said in its report. 

Surging backlash against data centers nationwide led to at least 45 projects, valued at nearly $68B combined, being blocked or delayed between April and June, according to a Data Center Watch report. At least 75 projects valued at about $130B were impacted in the first quarter.

The backlash against data centers has spilled over to solar power, with residents in some Georgia communities fighting against proposed solar panel farms in their neighborhoods because of their affiliation with the artificial intelligence build-out, Bisnow recently reported. 

Local pushback is forcing site selection professionals to evaluate a community’s history of opposition to projects even before approaching local leaders, said Larry Gigerich, executive managing director of the Site Selectors Guild. Grassroots opposition can significantly delay the timeline for proposed projects, if not outright kill them, he said.

And delays are the last thing companies want to encounter in pursuit of projects. 

“The speed-to-market issue, I think, is the one that really jumped up,” Gigerich said. “Companies want to make a decision. They want to get construction started and start their operations after construction as fast as possible.”

Five years ago, Smith said companies and site selection experts focused on property entitlements and the time it would take to get a green light to move forward on a project. But that’s no longer the first question they’re asking.

“That has flipped,” she said. “The first is, ‘Is there power, and can we reasonably get it?’”