Data Center Mythbusting: Clearing Up the Industry's Biggest Misconceptions
by Mike Rareshide, on Jun 18, 2026 7:00:00 AM
Few industries are growing faster than the data center industry, and fewer still are more clouded by misinformation. As AI, cloud computing, and digital infrastructure demand accelerate, communities across the country are increasingly encountering proposed data center developments in their backyards and responding with what's commonly known as NIMBY (Not in my Backyard) opposition. This resistance is often fueled by misconceptions rather than facts, and it’s costing communities real economic opportunity.
As someone who works every day at the intersection of real estate, infrastructure, and community engagement, I've heard the concerns firsthand. Some are legitimate questions that deserve honest answers and conversation. Others are myths that, left unchallenged, drive poor policy decisions and cost communities real economic opportunity.
Myth #1: Data Centers Are Industrial Facilities That Belong in Industrial Zones
The Reality: Modern data centers are among the most quietly operated large-scale facilities in commercial real estate. They generate minimal truck traffic, no meaningful odor, no smokestacks, and far less noise than a typical distribution warehouse or manufacturing plant. Many are built to architectural standards that blend seamlessly into suburban or semirural environments. If you've driven past one without knowing it, that's by design.
Myth #2: Data Centers Will Drain Our Water Supply
The Reality: Water usage is one of the most actively evolving areas of data center design, and the industry is responding with genuine innovation, not just PR.
As of August 2024, Microsoft began deploying a closed-loop, chip-level liquid cooling system that eliminates evaporative water use entirely, reducing annual water consumption by more than 125 million liters per facility. All new Microsoft datacenter designs now use this technology, with zero-water evaporation becoming the standard across their owned portfolio. More broadly, closed-loop systems that reuse recycled wastewater can reduce freshwater consumption by up to 70%, while newer technologies like direct-to-chip and immersion cooling reduce both water and energy usage simultaneously.
Responsible site selection specifically evaluates local water availability and rights as part of the feasibility process. No credible developer selects a site where water stress would create a long-term operational or community problem, and the industry’s rapid technological progress means that concern is becoming less relevant with each new facility built.
Myth #3: Data Centers Will Strain Our Power Grid and Drive Up Our Electric Bills
The Reality: This is perhaps the most persistent and damaging myth, and one that’s considerably more optimistic for host communities when siting is done right.
Data centers are premium, long-term utility customers. They bring a stable, predictable load that utilities actively plan around and usually welcome. The key is in the site selection due diligence, working with utilities proactively to ensure the new load aligns with planned grid capacity rather than overwhelming it.
This is exactly where Site Selection Group can make a meaningful difference. Before a single shovel breaks ground, SSG evaluates transmission context, utility receptivity, and realistic power delivery timelines. We excel at identifying sites where grid capacity exists or where planned infrastructure makes energization feasible within a project’s horizon.
Where grid concerns are legitimate, they are almost always a function of poor siting discipline, not the industry itself. When developers engage the right partners and markets, data center investment becomes a catalyst for grid upgrades that benefit the entire region and population.
Myth #4: Data Centers Are a Bad Deal for Local Taxpayers
The Reality: The fiscal math on data centers is extraordinary, and it’s not speculative; it’s well-documented in county budgets.
Data center tax revenue in Loudoun County, Virginia, totaled $875 million in FY2024, which was $35 million more than the entire county government operating budget, and is projected to exceed $1 billion, all generated from less than 3% of Loudoun’s land.
For every dollar spent on public services for data centers, $26 are returned in tax revenue. That revenue stream has enabled the county to reduce the real property tax rate for homeowners every single year for the past decade, now the lowest of any county in Northern Virginia. Without it, the typical homeowner would pay roughly $5,800 more per year.
The school funding impact is equally tangible beyond Virginia. In DeKalb, Illinois, Meta’s data center was billed $31.1 million in property taxes in 2025, with nearly 61% flowing to the local school district. These taxes directly funded the construction of a new elementary school that opened in 2025.
A single data center campus can generate more tax revenue than entire shopping districts while requiring a fraction of the public infrastructure investment. It’s a fiscal profile that virtually no other commercial development can match.
Myth #5: This Could Go Anywhere - Why Here?
The Reality: Data centers can’t go just anywhere. The site selection process is extraordinarily complex. A viable location requires proximity to high-voltage transmission infrastructure, available fiber routes, a receptive utility with realistic power delivery timelines, favorable permitting environments, sufficient resources, and workforce availability, all converging in the same geography.
When a developer selects a site, it is the product of exhaustive technical evaluation across dozens of variables. Firms like Site Selection Group spend considerable time and resources stress-testing prospective markets against exactly these criteria before a client ever commits to due diligence, because the cost of getting it wrong, in time, capital, and missed energization windows, is simply too high.
Communities that find themselves under consideration have real, quantifiable infrastructure assets of genuine national value. The more productive question is not why a developer selected this site, but what the community stands to gain by coming to the table informed and engaged.
Myth #6: Data Centers Are Bad for the Environment
The Reality: The data center industry is among the largest corporate procurers of renewable energy in the world, and by a significant margin. Major hyperscalers have made binding commitments to carbon neutrality and are driving unprecedented investment in solar, wind, and emerging clean energy technologies.
It is also worth remembering that data centers power the very technologies driving environmental progress elsewhere, including remote work, precision agriculture, smart grid management, and AI-driven energy optimization. The environmental calculus is far more complex than a simple land-use comparison suggests.
According to a BloombergNEF report, Meta, Amazon, Google, and Microsoft accounted for 49% of all corporate clean energy procurement in 2025. Meta and Amazon alone contracted a combined 20.4 GW, including nearly 4.7 GW of nuclear power. Amazon's clean energy portfolio now spans more than 700 projects across 28 countries.
The milestone achievements are equally striking. Microsoft announced in early February 2026 that it had met its 2025 renewable energy goal, contracting enough clean electricity to match 100% of its consumption across data centers, offices, and campuses worldwide—with 40 GW of renewable energy contracted and 19 GW already online.
The U.S. saw 29.5 GW of clean energy power purchase agreements signed in 2025, dominated by hyperscalers like Meta, Amazon, and Google, and over 90% of all new electricity generation capacity added in the U.S. that year came from clean energy sources.
Myth #7: Data Centers Don’t Create Enough Local Jobs to Be Worth It
The Reality: The jobs picture deserves an honest answer, not an inflated one, and the honest answer is still compelling.
On construction, the numbers are substantial and well-documented. A 100 MW hyperscale campus typically employs roughly 850 construction workers over an 18-month build phase, and those jobs pay a premium. Construction workers on data center projects are earning up to 30% more than on comparable builds, with many reaching six-figure salaries during the current AI-driven buildout boom.
For permanent employment, expectations should be calibrated to facility type and scale. A highly automated hyperscale campus will employ fewer people per square foot than a mid-size colocation facility. Communities deserve accurate projections, not inflated ones. But the broader labor market impact is real. In Virginia, each job inside a data center supports an additional 3.5 jobs in the broader state economy.
And as the tax revenue data shows, data centers fund the public services—schools, roads, emergency services— that support employment across the entire community, long after the ribbon-cutting.
The Bigger Picture
Community resistance to data centers is understandable. Communities have every right to ask hard questions about what gets built in their midst.
The problem is when those questions are answered with misinformation rather than facts, and when good projects fail not because they were wrong for a community, but because accurate information was never part of the conversation.
These projects that are turned away by misinformation don’t disappear. The investment, the jobs, and the tax revenue simply land somewhere else. Data centers are the physical backbone of the digital economy, and where they get built shapes U.S. competitiveness and local economic trajectories for decades.
At Site Selection Group, we know that getting these decisions right requires accurate information, genuine community engagement, and advisors who understand both the technical and human dimensions of the process. Strategic site selection isn’t just about finding land—it’s about finding the right land, in the right market, with the utility relationships, permitting environment, and community posture to support a project for the long term.
When those factors align, data centers don't just get approved. They become assets that communities point to with pride.
