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Now that data centers have become a topic of news coverage and mainstream political debates, developers face more barriers than ever. New research from Bloom Energy finds that community scrutiny — primarily over electricity prices, water consumption, and grid reliability — is a growing threat to the AI infrastructure buildout. Without addressing these issues, the data center boom could grind to a halt, threatening American competitiveness.
The 2026 Data Center Power Report: Mid-Year Update surveyed 156 hyperscalers, colocation providers, neoclouds, data center developers, and chip developers on factors stalling large-scale projects. While power availability remains the top challenge, 28% said community opposition has worsened over the past six months.
In the face of this opposition, developers are increasingly turning to on-site power, which can reduce strain on local grids and address community concerns over water use, noise and air quality. Industry leaders told Bloom that they expect one-third of all U.S. data centers to run entirely on on-site power by 2030 — a massive shift that is already underway in 2026.
Data center development faces a growing list of barriers
In June 2025, 84% of Bloom survey respondents cited power availability as a top three consideration for site selection. This year, 51% of respondents ranked it in their top three.
That 33-point drop illustrates that while power availability is still the dominant issue, other constraints are growing in parallel. Proximity to fiber optic networks, availability of land, and the constraints presented by local regulations also ranked as key considerations in site selection.
In addition to community scrutiny, developers cited construction costs (35%), cost of grid upgrades (28%), and availability of critical equipment (26%) as worsening or significantly worsening barriers.
Many of these barriers are related to electrical power. It’s just that the mere availability of power is no longer sufficient. Now, developers also must consider adjacent factors, like the availability of generators and transformers, the increasingly long timeline for power grid connections, and the perceived impact of the data center’s power use on other utility customers.
Closing the gap between community concerns and developer choices
According to a 2026 Gallup survey, more than 70% of Americans oppose AI data centers being built near their homes. This has a measurable impact on project outcomes: Communities have blocked or delayed more than $64 billion of projects. Local regulators have enacted or proposed at least 18 state bills and 86 local moratoriums opposing data center development across the country.
National polling shows that communities are most concerned about data centers’ impact on water consumption and grid reliability. Developers polled by Bloom also identified these two areas as the top factors driving community scrutiny, alongside local electricity prices.
However, developers aren’t meeting communities’ concerns. Only 33% of survey respondents reported investing in grid support and resiliency and just 29% invested in minimizing water consumption. Instead, 54% prioritized creating local economic benefits and 53% focused on holding public forums.
This disconnect between what communities care about and how developers engage with them accounts for the worsening public sentiment about data centers. It also presents an opportunity. Developers that close this gap by addressing community needs will gain a competitive advantage.
Some developers are looking at carbon capture, utilization, and storage (CCUS) technologies to address community concerns around emissions. Bloom’s survey respondents expect 31% of U.S. data centers with on-site power to incorporate some CCUS by 2030, rising to 41% by 2035.
But that’s just a start. Newer technologies for generating power, such as fuel cell systems, directly address local concerns not just through carbon capture but through the power generation itself, delivering grid resiliency, low emissions, quieter operations, and negligible water use.
Future-looking solutions built for local needs
“Access to power remains the biggest constraint to data center growth, but it is not the only issue. Community concerns are increasingly shaping which projects move forward,” said Natalie Sunderland, Chief Marketing Officer at Bloom Energy. “It’s time for data center developers to embrace clean, on-site power solutions that reduce strain on local infrastructure while bringing new capacity online faster. The winners in the next phase of AI buildout will be those that can grow in a way that works for both operators and the communities that host them,” she said.
Data center developers need new approaches to stay ahead of today’s challenges — and tomorrow’s. Bloom Energy’s solid oxide fuel cells deliver 100 MW of reliable on-site power in 120 days — with lower emissions and fewer regulatory hurdles. They operate nearly silently and require minimal water during normal operation, eliminating two of the most frequent local objections to data centers.
Bloom’s fuel cell systems are carbon capture-ready, since they produce CO2 with near-zero criteria pollutants. As CCUS adoption grows, this offers developers a path to lower emissions while maintaining reliability and speed to power.
The survey demonstrates that the AI buildout now requires a multidimensional approach to project development. In this new era of heightened community scrutiny, developers who succeed will rely on multipronged solutions like clean on-site power and CCUS that secure access to power, address emissions, and support grid reliability.
Download Bloom’s 2026 Data Center Power Report: Mid-Year Update or learn more by visiting bloomenergy.com.
