Material Insights · Understanding the Material World

Data centres and cloud and Solar photovoltaics

Cloud and AI firms are the largest corporate buyers of renewable power, and solar is a main part of what they contract, but solar output peaks at midday while data centres run all day, so the pair is tied by contracts and by the need for storage or firm power alongside.

Data centres and cloud (industry) and Solar photovoltaics (energy): 4 relationships.

How they are linked

1. Industry input

Physical flow · Strong · Solar photovoltaics → data centres and cloud

Data centre operators buy solar power, on site or more often through contracts with power developers, to cut energy costs and meet carbon goals; the site rates solar 5 of 5 for clean-power developers selling solar PPAs and 4 of 5 for hyperscale cloud providers.

  • about 27% renewables share of data centre electricity worldwide, 2024
  • 22% a year IEA projected growth of renewable generation for data centres, 2024 to 2030
  • 2 enterprise types in this industry that depend on solar

Renewables are expected to be the fastest-growing source of supply for data centres this decade. The IEA groups solar with wind and hydro, so it gives no separate solar share; solar is cheap to build but needs pairing with other sources to meet constant load.

Enterprise types that depend on it:

  • Utilities and clean-power developers: solar PPAs (criticality 5 of 5)
  • Hyperscale cloud providers: renewable procurement (criticality 4 of 5)

Sources: Material Insights; IEA

2. Tech PPAs fund solar build

Transition · Strong · Data centre owners → new solar capacity

Long-term power purchase agreements give solar developers the steady revenue they need to raise finance, and tech companies sign more of these contracts than any other sector.

  • 49% share of global corporate clean PPA volume signed by Amazon, Meta, Google and Microsoft, 2025
  • 55.9 GW global corporate clean PPA volume, 2025, down 10%
  • about 40% tech sector share of corporate renewable PPAs signed in 2025

Corporate PPA volume fell in 2025, the first decline after eight years of growth; North America was the only region to grow, while Asia Pacific fell 36%, mainly because of slowdowns in India and South Korea. Demand from data centres is therefore concentrated in a few buyers and regions, which leaves developers exposed to their spending plans.

Sources: IEA; ESG Today

3. Midday supply, all-day load

Transition · Medium · Solar output ↔ constant data centre demand

Solar generates mainly at midday, while a data centre draws near-constant power, so buying solar on an annual basis leaves hours, especially nights, met by other sources.

To cover the hours solar cannot, buyers add batteries, wind or firm power to their solar supply. In India, developers expect more hybrid and battery storage projects to serve data centres.

Sources: Saur Energy International; Datacentres.com

4. Open access in India

Policy · High in India · Indian open access rules → solar supply to data centres

Rooftop solar cannot meet a data centre's load, so Indian operators buy most green power from off-site plants through green energy open access, whose rules decide who may contract directly.

  • 100 kW minimum contracted load to qualify for green energy open access
  • about 0.5% data centres' share of India's power demand, 2024
  • 350 MW solar NTT India planned to install for its data centres, 2024

Lowering the open access threshold widened access to green power, and cheap renewable tariffs compared with thermal power are a main reason Indian operators buy it. Their share of demand is still small, so growth in data centre parks is a new but modest source of solar offtake.

Sources: Saur Energy International

For investors

Key learnings

  1. Four hyperscalers, Amazon, Meta, Google and Microsoft, signed 49% of the world's corporate clean PPA volume in 2025, so solar developers' contracted pipelines depend on their capex plans.
  2. Solar alone cannot match a data centre's all-day load, so value is shifting to hybrid contracts with storage or wind.
  3. In India, renewable tariffs below thermal power are a main reason data centres buy green power through open access, and NTT India planned 350 MW of its own solar in 2024.

What to track

  • Corporate clean PPA volumes by buyer and region: Strength and concentration of tech demand for solar offtake (Yearly · BloombergNEF)
  • Hyperscaler capital expenditure: Pipeline of new data centres that will seek power contracts (Quarterly · company results)
  • Hybrid and storage-backed PPA tenders: Whether buyers are paying for firm clean supply rather than solar energy alone (Monthly · developer announcements, state agencies)

For policymakers

Key learnings

  1. Open access rules are the main channel through which Indian data centres buy solar, so changes to thresholds, surcharges and banking change their power costs.
  2. Because solar does not cover night load, data centre growth also adds demand for storage and firm power.
  3. Tech companies accounted for about 40% of corporate renewable PPAs signed in 2025, so policy that eases contracting for them can bring forward solar investment.

What to track

  • Green energy open access approvals and charges by state: Cost and ease of renewable supply for data centres (Quarterly · state regulators and nodal agencies)
  • Data centre share of national power demand: How fast this load is growing relative to the grid (Yearly · Central Electricity Authority, industry reports)

India

India's data centre capacity reached almost 1.5 GW in 2025, according to the IT ministry; data centres drew about 0.5% of national power demand in 2024 and buy most green power through open access, with NTT India planning 350 MW of solar and Nxtra having contracted 422,000 MWh of renewable energy by mid-2024.

Sources

  1. Data centres and cloud: materials, Material Insights (2026)
  2. Energy and AI: energy supply for AI, IEA (2025)
  3. Data centre electricity use surged in 2025, even with tightening bottlenecks driving a scramble for solutions, IEA (2026)
  4. Amazon, Meta, Google, Microsoft account for half of global clean energy purchase deals in 2025 (BloombergNEF data), ESG Today (2026)
  5. India's data centre boom opens up a fresh segment for green developers, Saur Energy International (2024)
  6. The hourly matching reckoning, Datacentres.com (2026)
  7. India's DC capacity almost touched 1.5 GW in 2025: IT Ministry, W.Media (2026)