Solar notches another win as Microsoft adds 475 MW to power its AI data centers

Solar notches another win as Microsoft adds 475 MW to power its AI data centers

  • 20.03.2025 15:14
  • techcrunch.com
  • Keywords: AI, Startup

Microsoft is expanding its renewable energy capacity by adding 475 MW from three solar projects in the Midwest. Solar's speed and affordability make it ideal for meeting the growing energy demands of data centers. Pairing solar with battery storage is becoming more cost-effective than traditional power sources.

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Estimated market influence

Microsoft

Microsoft

Positivesentiment_satisfied
Analyst rating: Strong buy

Leveraging solar energy to power its AI data centers, enhancing sustainability and meeting immediate energy needs.

AES

AES

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Analyst rating: N/A

Providing solar projects for Microsoft's renewable portfolio expansion.

Acadia

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Analyst rating: N/A

Organizing a project that Microsoft is anchoring.

Brookfield Asset Management

Brookfield Asset Management

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Analyst rating: Buy

Entered into a deal with Microsoft for 4.8 GW of renewable energy.

Context

Analysis of Microsoft's Solar Expansion for AI Data Centers

  • Key Deal Details

    • Microsoft signed a deal with AES for 475 MW of solar power across three Midwest projects in Illinois, Michigan, and Missouri.
    • This addition builds on Microsoft’s existing renewable portfolio, which already exceeds 34 GW.

  • Market Trends

    • Tech companies are increasingly adopting renewables due to their cost-effectiveness and speed-to-market compared to traditional energy sources.
    • Solar projects can start supplying power in about 18 months, addressing the urgent demand for data center electricity.

  • Strategic Considerations

    • Microsoft’s recent solar investments include a 4.8 GW deal with Brookfield Asset Management, set to deliver by 2030.
    • The company is leveraging hybrid systems (solar + battery storage) to ensure around-the-clock power, though these are still more expensive than natural gas or nuclear options.

  • Competitive Dynamics

    • Renewables are encroaching on the cost of new natural gas and nuclear plants, with solar and battery costs declining significantly.
    • Data center demand is growing rapidly, with up to 30% of planned capacity potentially underpowered by 2027 due to delays in traditional power plant development.

  • Long-Term Implications

    • The shift to renewables aligns with global sustainability goals and reduces reliance on slower-to-develop energy sources like nuclear or natural gas.
    • Solar’s scalability and speed make it a critical component for tech companies aiming to meet their energy needs while addressing climate change.