The warnings about artificial intelligence’s appetite for energy are real. Data centers powering the AI revolution consumed an estimated 460 to 490 terawatt-hours of electricity globally in 2025 — roughly the annual output of 50 large nuclear plants — and the International Energy Agency projects that figure will nearly double by 2030. In the United States alone, data center energy demand is expected to jump from 80 to 150 gigawatts between 2025 and 2028.
Water consumption tells a similar story. Traditional data center cooling systems draw heavily on local water supplies, and U.S. data center water use could double or even quadruple by 2028, reaching as much as 280 billion liters per year. In states like Texas, the numbers are staggering — data centers there are projected to consume 399 billion gallons of water annually by 2030.
These are legitimate concerns. But they are problems with emerging solutions — and Iowa may be better positioned than almost any other state to be part of the answer.
Solar Is Scaling Faster Than Most People Realize
While the AI energy debate has dominated headlines in the United States, the rest of the world has been quietly building the infrastructure to solve it. In the first quarter of 2026 alone, India installed 15.3 gigawatts of new solar capacity — a single-quarter record and a 143 percent increase over the same period a year earlier. India’s cumulative installed solar capacity now stands at 152 gigawatts, with solar accounting for 55 percent of the country’s total renewable energy capacity.
India is not an outlier. Solar installation costs have dropped more than 90 percent over the past decade, and utility-scale solar is now the cheapest form of new electricity generation in most of the world. Battery storage costs have followed the same curve — falling to roughly $70 per kilowatt-hour as of 2025, according to BloombergNEF — making around-the-clock solar power increasingly practical. The question for the United States — and for Iowa specifically — is not whether solar can power the AI age, but whether we move fast enough to capture the economic opportunity that comes with it.
What the Current Model Looks Like
Elon Musk’s xAI built the Colossus supercomputer facility in Memphis, Tennessee — currently the world’s largest AI training cluster, now expanding to 2 gigawatts of computing capacity. The facility has a solar array on site: 88 acres of panels producing roughly 30 megawatts of power. That sounds significant until you do the math. Thirty megawatts against a 2,000-megawatt facility means the solar installation covers about 1.5 percent of the energy demand. The rest comes from the grid — powered largely by fossil fuels.
That is not a criticism of xAI. It reflects the reality of siting a massive data center in a location without purpose-built renewable infrastructure. Iowa has the opportunity to do something fundamentally different.
Iowa’s Unique Advantage
Iowa already generates more than 60 percent of its electricity from wind, giving it one of the cleanest energy grids in the nation. Solar is now beginning to follow. As of early 2026, Iowa had 677 megawatts of solar capacity online. More significantly, 37 additional solar projects are currently in development statewide, representing a planned 5,164 megawatts of new capacity. MidAmerican Energy alone has filed plans with the Iowa Utilities Commission for an 800-megawatt solar project across multiple Iowa sites, with construction expected to begin in 2026.
That pipeline of renewable energy, combined with Iowa’s flat terrain, available land, and existing transmission infrastructure, makes the state an increasingly attractive location for the large-scale data centers that AI companies are racing to build. To power a 1-gigawatt data center entirely with solar and battery storage — running around the clock without drawing from the grid — would require roughly 25,000 acres of solar installation. That is a large number, but it translates to a familiar Iowa scale: about the size of a single township, six miles by six miles. With grid power available at night, that footprint could shrink to 5,000 to 14,000 acres.
The challenge has been the tension between using agricultural land for energy production and preserving it for food production. New research out of Iowa State University and the National Renewable Energy Laboratory suggests that tension may be largely a false choice.
Growing Food and Energy on the Same Land
Researchers at Iowa State University’s Department of Horticulture are conducting a four-year study on agrivoltaics — the practice of co-locating solar panels and agricultural production on the same land — at the Alliant Energy Solar Farm south of Ames. The National Renewable Energy Laboratory is conducting parallel research at its BARN site in Golden, Colorado, through the InSPIRE project, which is building a national evidence base for agrivoltaic production at scale. The early results from both programs are striking.
Over two growing seasons at the Iowa State site, the team produced broccoli, bell peppers, summer squash, strawberries, raspberries, and tomatoes under and around solar arrays using standard commercial farming equipment. Squash consistently outperformed crops grown in open fields. Peppers showed no significant yield loss. Drone imagery revealed taller plants and greater overall plant volume for multiple crops grown within the solar arrays, likely because the partial shade from panels reduced heat stress during peak summer conditions.
The benefits extended beyond vegetables. A separate component of the research found a 412 percent increase in honey production from beehive colonies at agrivoltaic sites, driven by the pollinator-friendly plantings that thrive in the partial shade beneath solar panels.
For Iowa farmers, the implications are significant. A solar farm that doubles as a vegetable operation or a pollinator habitat is not simply an energy installation — it is a diversified agricultural enterprise. Landowners would receive lease income from solar developers while continuing to generate revenue from the land itself.
Solving the Water Problem
The water consumption concerns associated with data centers are real, but they are not inevitable. Traditional data center cooling relies on evaporative systems that draw large volumes of water from local sources — a serious issue in regions already facing water stress.
Closed-loop liquid cooling systems, which recirculate coolant without drawing on external water supplies, reduce direct water consumption by 70 to 90 percent compared to conventional cooling methods. Industry analysts note that most major hyperscale data center projects announced in 2025 and 2026 are specifying closed-loop cooling infrastructure as a baseline requirement — driven both by water scarcity concerns and by the efficiency demands of high-density AI hardware.
For Iowa, where aquifer preservation is a growing concern in agricultural communities, the adoption of closed-loop cooling in new data center construction would substantially reduce the water footprint of large facilities. Combined with on-site solar generation from agrivoltaic installations, a modern Iowa data center could power itself from renewable energy while drawing minimally on local water resources.
A Hedge for Iowa’s Farm Economy
Iowa’s agricultural economy runs on corn and soybeans. Most of that production flows into two markets: ethanol, which depends on gasoline demand, and animal feed, which depends on meat consumption. Both of those markets are sensitive to the same force driving the AI buildout — changes in employment and consumer spending. As automation and AI begin to displace workers in logistics, manufacturing, and white-collar industries, the knock-on effects could reach Iowa fields. Workers who lose jobs drive less, which reduces ethanol demand. They also eat less beef and pork, which reduces feed grain demand. Tighter farm margins would follow.
Here is where the agrivoltaic model offers something unexpected: a price support mechanism. When farmland is converted to solar development — even partially, even while continuing to produce vegetables or support pollinators — it comes out of row crop production. Less corn and soybean acreage means tighter supply. Tighter supply, all else equal, means higher prices for the acres that remain in production. Iowa farmers who make the transition to solar and agrivoltaic operations earliest may find themselves better positioned on two fronts: collecting solar lease income while the value of their remaining crop ground is supported by reduced overall supply. It is not a guaranteed outcome, and the economics will vary by location and contract terms. But it is worth factoring into how Iowa thinks about land use policy going forward.
A Model Worth Building
The convergence of these trends — rapidly scaling solar, falling battery costs, promising agrivoltaic research, advancing cooling technology, and Iowa’s existing renewable energy infrastructure — points toward a development model that has not yet been fully articulated or pursued at the state policy level.
Large-scale AI data centers sited adjacent to or within agrivoltaic solar installations, cooled with closed-loop systems and powered by Iowa-generated renewable energy, would represent a significant economic opportunity for rural communities. They would bring construction jobs, permanent technical employment, and lease revenue to farm families, while positioning Iowa as a national leader in sustainable AI infrastructure.
The energy and environmental challenges posed by artificial intelligence are genuine. But for Iowa — with its land, its agricultural expertise, its renewable energy grid, and its research universities — those challenges look less like threats and more like an opening.
