The year is 2026, and Sarah Chen, owner of a mid-sized manufacturing plant in Dayton, Ohio, stared at the latest utility bill with a growing sense of dread. Her company, Dayton Precision Parts, had seen its operational costs surge by nearly 15% over the past year, much of it attributed to increased electricity rates. This wasn’t just a minor fluctuation. It threatened her razor-thin margins and the 80 jobs her plant provided. She knew the culprit: the proliferation of massive data centers across Ohio, drawing immense power and, she suspected, driving up prices for everyone else. Was this influx truly an economic boom for the state, or was it quietly creating a bust for established local businesses?
Key Takeaways
- Ohio hosts over 100 operational data centers, with an estimated 40 more under development as of early 2026, primarily concentrated in Central and Western Ohio.
- The average hyperscale data center consumes electricity equivalent to a small city, approximately 20 to 50 megawatts, significantly impacting regional energy grids.
- While data centers create high-paying tech jobs (average salary over $90,000 according to a 2025 Ohio Department of Job and Family Services report), these are often fewer in number than the construction jobs they initially generate.
- Property tax abatements and sales tax exemptions offered to data center developers in Ohio can reduce state and local revenue by hundreds of millions of dollars annually, potentially shifting the tax burden to other businesses and residents.
- Local communities should implement complete impact studies and negotiate community benefit agreements to mitigate negative effects like increased utility costs and water strain.
Sarah’s concern was hardly isolated. Across Ohio, a quiet but intense debate has been brewing for the past few years, pitting the allure of tech investment against the tangible pressures it places on existing infrastructure and communities. Data centers, those nondescript, fortress-like buildings filled with humming servers, have flocked to Ohio, drawn by affordable land, strategic location, and, critically, generous state incentives. The numbers are staggering: as of early 2026, Ohio has over 100 operational data centers, with an additional 40 or so under various stages of development. These aren’t just small server rooms. Many are hyperscale facilities, operated by tech giants, each demanding immense quantities of power and water.
The immediate narrative, often championed by state economic development agencies, points to job creation and investment. A 2025 report from JobsOhio, the state’s private economic development corporation, highlighted that data center projects had attracted over $15 billion in capital investment since 2020. This investment often translates into thousands of construction jobs initially, providing a significant boost to local labor markets. For instance, the construction of a new Google data center campus near Columbus employed an average of 1,200 workers over its two-year build-out phase, according to local union representatives.
However, the long-term operational job count tells a different story. Once built, a hyperscale data center typically requires a relatively small, highly specialized workforce. “You’re looking at maybe 50 to 150 permanent, highly skilled technicians and engineers for a facility that cost a billion dollars to build,” explained Dr. Evelyn Reed, an urban economist at Ohio State University, in a recent interview. “These are excellent, high-paying jobs, often with salaries exceeding $90,000 annually, which is certainly a positive. But the sheer capital investment versus the ongoing job creation ratio is markedly different from, say, a new manufacturing plant.”
The Energy Conundrum: A Rising Tide Lifts All Bills?
For businesses like Sarah Chen’s, the most immediate and painful impact is often on utility costs. Data centers are insatiable consumers of electricity. An average hyperscale data center can consume anywhere from 20 to 50 megawatts of power, enough to power a small city. This demand puts immense strain on the regional power grid. “When you bring online multiple facilities, each drawing the equivalent of thousands of homes, it necessitates significant upgrades to transmission infrastructure and can drive up wholesale electricity prices,” stated Mark Davis, a senior energy analyst with the Public Utilities Commission of Ohio (PUCO). “These costs are eventually passed down to all consumers, residential and commercial alike.”
Dayton Precision Parts, located near the burgeoning data center corridor stretching from Columbus to Cincinnati, found itself directly in the path of this energy surge. Sarah had invested heavily in energy-efficient machinery in 2023, expecting to stabilize her utility expenses. Instead, the baseline cost per kilowatt-hour had steadily climbed. “We did everything right,” Sarah lamented, gesturing at a spreadsheet detailing her energy consumption. “New LED lighting, optimized HVAC, even a solar array on the roof. But if the fundamental cost of power keeps going up because of these mega-consumers, what’s the point?”
The problem is compounded by the incentives offered to attract these data centers. Ohio Revised Code Section 5739.02(B)(42) grants sales tax exemptions for equipment used in data centers, and many localities offer property tax abatements for extended periods. While these incentives are designed to make Ohio competitive with states like Virginia and Arizona, they also mean that the very entities consuming the most resources contribute less to the local tax base that funds schools, roads, and public services. “It’s a classic economic development dilemma,” Dr. Reed observed. “You want the investment, but you have to weigh the benefits against the foregone revenue and the stress on public goods.”
Water, Land, and Local Impact
Beyond electricity, data centers also require substantial amounts of water, primarily for cooling their servers. While some facilities are exploring air-cooling or closed-loop systems, many still rely on evaporative cooling, especially in warmer months. This can strain local water supplies, particularly in areas already facing water stress. The city of New Albany, for example, has seen its water demand increase dramatically with the concentration of data centers in its business park, prompting discussions about infrastructure upgrades and potential water conservation measures.
The sheer footprint of these facilities also consumes vast tracts of land. A typical hyperscale data center campus can span hundreds of acres. While often located in industrial parks or rural areas, this rapid land acquisition can push up property values for surrounding parcels, making it harder for other types of businesses or even residential developers to acquire land at reasonable prices. “We’ve seen land prices near major data center hubs jump by 30 to 50 percent in just a few years,” noted Robert Jenkins, a commercial real estate broker in Columbus. “It creates a boom for landowners who sell, but it can price out smaller businesses looking to expand.”
For Sarah, the implications were clear. Her business needed stable, predictable costs to plan for the future. The volatility introduced by the data center boom, particularly in energy prices, made long-term forecasting a nightmare. She considered relocating, but the cost of moving her specialized machinery and re-establishing her supply chain was prohibitive. “We’ve been in Dayton for three generations,” she said, her voice tinged with frustration. “We’re part of the fabric here. But if we can’t compete on basic operating costs, what choice do we have?”
Working through the Future: A Call for Balanced Growth
The story of Dayton Precision Parts highlights a critical tension. Data centers undoubtedly bring significant investment and high-tech jobs, bolstering Ohio’s profile as a digital hub. However, the benefits are not evenly distributed, and the costs, particularly in terms of energy and infrastructure strain, are often borne by a broader population. The challenge for Ohio policymakers is to cultivate this growth responsibly, ensuring that the economic boom for one sector doesn’t inadvertently create a bust for others.
Some communities are beginning to address these concerns proactively. In Licking County, where several large data centers operate, local officials have started negotiating community benefit agreements with developers. These agreements can include provisions for infrastructure contributions, local hiring targets, and even direct payments to support local schools or public services, helping to offset the impact of tax abatements. According to a recent report by the Ohio Economic Development Association, such agreements are becoming more common as communities gain experience with the data center industry.
Plus, there is a growing push for data centers to adopt more sustainable and efficient cooling technologies, such as liquid cooling or direct-to-chip cooling, which significantly reduce water consumption. The Ohio Department of Natural Resources has also increased its scrutiny of large water withdrawals, requiring more detailed impact assessments from new industrial users. These measures, while perhaps slowing down development slightly, aim to ensure that growth is sustainable in the long run.
For Sarah Chen, the immediate future remains uncertain. She has joined a coalition of small and medium-sized manufacturers advocating for more transparent utility pricing structures and a re-evaluation of the long-term costs and benefits of data center incentives. “We’re not against progress,” she stated emphatically. “We just want a level playing field. We want Ohio to be a place where all businesses, not just the biggest tech companies, can thrive.”
The story of data centers in Ohio is far from over. It is a complex narrative of innovation and growth, intertwined with questions of equitable resource distribution and sustainable development. The state’s ability to balance these competing interests will determine whether the data center surge truly becomes an economic boom for all, or if it leaves some vital sectors struggling in its wake.
Businesses like Sarah Chen’s must actively engage with local and state policymakers, advocating for policies that ensure the benefits of new industries are broadly shared, and that infrastructure costs are fairly distributed. Understanding the specific impacts of large-scale development on your operating environment is the first step toward protecting your business’s future.
What are the primary economic benefits of data centers in Ohio?
Data centers bring significant capital investment to Ohio, often totaling billions of dollars. They create numerous construction jobs during their build-out phases and provide a smaller number of high-paying, specialized operational jobs in technology and engineering roles, with average salaries often exceeding $90,000 annually. They also contribute to the state’s reputation as a tech-friendly business environment.
How do data centers impact Ohio’s electricity grid and utility costs?
Hyperscale data centers consume massive amounts of electricity, comparable to small cities (20 to 50 megawatts per facility). This high demand can strain the regional power grid, necessitate costly infrastructure upgrades, and contribute to increased wholesale electricity prices, which are then passed on to all consumers, including residential and commercial users.
What incentives does Ohio offer to data center developers?
Ohio provides significant incentives to attract data centers, including sales tax exemptions for equipment purchases under Ohio Revised Code Section 5739.02(B)(42). Many local jurisdictions also offer property tax abatements, sometimes for extended periods, to encourage development within their boundaries.
Do data centers use a lot of water?
Yes, many data centers use substantial amounts of water, primarily for cooling their servers through evaporative cooling systems. This can place stress on local water supplies, particularly in regions with high concentrations of data centers, leading to increased demand for water infrastructure and potential conservation measures.
What can local communities do to mitigate the negative impacts of data center development?
Local communities can implement complete impact studies before approving projects, negotiate community benefit agreements with developers to secure contributions for infrastructure and public services, and advocate for sustainable cooling technologies to reduce water and energy consumption. Engaging with state regulators on utility pricing and infrastructure planning is also important.
