January 24, 2026

South Carolina Lawmakers Seek Balance in Data Center Regulations

Charleston, SC, January 24, 2026

As South Carolina’s data center industry experiences rapid growth, lawmakers are engaging in bipartisan discussions to craft regulations that balance economic growth with environmental sustainability. The state has attracted significant investments from major tech firms, leading to debates on managing energy and water demands. Proposed legislative measures aim to ensure data centers are accountable for their resource usage while fostering an environment conducive to technological innovation and local economic growth.

Charleston, SC – As South Carolina experiences a surge in technological investment, particularly from the rapidly expanding data center industry, lawmakers at the Statehouse are actively engaging in a bipartisan dialogue to shape regulations that balance economic growth with environmental and infrastructural sustainability. This proactive approach reflects a commitment to fostering an environment where South Carolina entrepreneurs can thrive while ensuring the state’s resources are responsibly managed for all citizens.

The state has become an attractive hub for these digital powerhouses, drawing significant private investment from major technology firms like Google, which has committed billions to expand its cloud and data center infrastructure in Dorchester County. The expansion of facilities, such as DartPoints’ $125 million upgrade in Greenville County, underscores the growing demand for critical IT power and high-performance computing essential for advancements in artificial intelligence Nationwide. These developments bring vital jobs and contribute to the local tax base, yet their rapid proliferation necessitates careful consideration of their broader impact on the state’s resources and communities.

South Carolina’s Digital Boom and Economic Opportunities

South Carolina’s strategic location, coupled with its evolving infrastructure and business-friendly environment, has positioned it as a significant player in the data center industry. The state currently hosts approximately 35 data centers across various regions, including Charleston, Columbia, Greenville, and Spartanburg, contributing to the broader Charleston County economy. These facilities are central to the modern digital economy, powering everything from cloud services to advanced artificial intelligence applications. The influx of such technological enterprises stimulates local economies, creates specialized employment opportunities, and enhances the state’s technological footprint, fostering an environment ripe for entrepreneurial innovation and growth.

The Resource Imperative: Energy and Water Demands

The burgeoning data center sector, while economically beneficial, presents considerable challenges related to energy and water consumption. A single large-scale data center can consume electricity equivalent to powering a city of 125,000 people and enough water for a town roughly half that size. This immense demand is a significant factor in rising electricity demand across South Carolina. Nationwide, electricity demand from data centers more than doubled from 1.9% of total U.S. electricity consumption in 2018 to 4.4% in 2023, with forecasts predicting it could reach between 6.7% and 12.0% by 2028. Such projections raise legitimate concerns among residents and lawmakers about the strain on existing utility infrastructure and the potential for increased residential utility bills.

The Legislative Response: Seeking Balance

In response to these concerns, a strong bipartisan push is emerging at the Statehouse to establish a robust regulatory framework for data centers. Senator Tom Davis, a Beaufort Republican, is preparing to introduce comprehensive legislation designed to allow South Carolina to remain competitive in the AI-driven economy while safeguarding the state’s energy grid, water resources, and sensitive environmental areas. Key proposals include requiring data center operators to bear their full energy and infrastructure costs, mandating the use of “closed-loop” technologies for water recycling, and implementing siting restrictions along with noise and light regulations to preserve environmental quality and residential well-being.

Similarly, Representative April Cromer, a Republican from Anderson, has introduced the “Data Center Responsibility Act,” a stringent bill that would require data centers to achieve complete energy independence by generating all their power on-site, prohibit the removal of surface or groundwater, and mandate a minimum of one employee per 1,000 feet of floor space. This legislation also proposes to eliminate direct or indirect state or local taxpayer-funded incentives, grants, tax abatements, subsidies, utility rate reductions, or infrastructure improvements if they primarily benefit the data center facility. These legislative discussions highlight a shared understanding across political lines that thoughtful regulation is necessary to manage rapid development responsibly. A past attempt in the Senate to remove data center tax incentives and require 15-year power purchase agreements, part of an amendment to the H.3309 “S.C. Energy Security Act,” was removed by the House, along with provisions for water usage reporting.

Perspectives on Incentives and Sustainable Growth

The debate surrounding data center regulations in South Carolina involves various perspectives on the role of incentives and the path to sustainable growth. Advocates for stronger regulation emphasize that the average South Carolinian should not be burdened with higher utility costs to subsidize large technology companies. They point to the fact that from 2015 to 2024, data centers received approximately 53% of the state’s incentives, and polls indicate declining public support for data centers when residents are informed about potential increases in energy bills. Concerns have also been raised by local communities, such as those in Colleton County, where residents have protested proposed data center projects due to worries about water usage, power demand, and their quality of life. Local governments, like the city of Gaffney, are proactively developing zoning classifications that require data centers to verify sufficient power and water infrastructure before construction.

Conversely, proponents of existing or limited regulation argue that statutory tax incentives are crucial for attracting entrepreneurial innovation and the high-density compute infrastructure necessary for continued technological advancement. They suggest that emerging data center models, which are modular and energy-flexible, can play a vital role in supporting real-time demand response, rural revitalization, and public-sector compute needs. Furthermore, industry representatives argue for technology-neutral policies that reward energy efficiency and strengthen infrastructure investment rather than imposing narrow design standards. The data center industry has also been a leader in clean energy adoption Nationwide, accounting for two-thirds of American wind and solar contracts as of last year. Balancing these viewpoints is central to crafting policies that enable economic dynamism without imposing undue burdens on citizens or natural resources.

Impact on Charleston and the Lowcountry Economy

The outcomes of these statewide legislative efforts will significantly shape the landscape for Charleston SC business and the broader Lowcountry economic growth. Decisions made regarding energy costs, water usage, and tax incentives for data centers will influence the operational expenses for all businesses and residents within the region. For instance, Dorchester County’s capacity allocation for water has been increased to service economic and community development, including new data centers. A balanced approach that ensures large-scale technological investments pay their fair share of infrastructure costs could safeguard existing Charleston small business enterprises from indirect subsidies and help maintain competitive utility rates. It also ensures that the environmental integrity and quality of life that define the Lowcountry remain protected as the region continues to grow. The ongoing dialogue at the Statehouse is therefore not just about data centers, but about charting a sustainable economic future for all of South Carolina.

The legislative efforts underway in South Carolina represent a critical juncture in the state’s economic development trajectory. By engaging in bipartisan discussions, lawmakers aim to strike a delicate balance: continuing to attract the innovative technology sector that fuels job creation and investment, while simultaneously protecting the state’s precious natural resources and ensuring that the costs of growth are equitably distributed. The future of Lowcountry economic growth, Charleston small business, and the broader well-being of South Carolina entrepreneurs hinges on these thoughtful policy decisions. Staying informed and engaged in these discussions is vital for all residents invested in the sustainable prosperity of our state.

Frequently Asked Questions (FAQ)

What are the main concerns regarding data center expansion in South Carolina?

The main concerns regarding data center expansion in South Carolina include their significant energy and water consumption, potential for rising residential utility bills, strain on existing infrastructure, environmental impact, noise, light pollution, and land use.

What types of regulations are being proposed for data centers in South Carolina?

Proposed regulations for data centers in South Carolina include requiring operators to pay all their own energy and infrastructure costs, mandating “closed-loop” technologies for water recycling, imposing siting restrictions alongside noise and light regulations, requiring complete energy independence, prohibiting surface or groundwater removal, mandating at least one employee per 1,000 feet of floor space, and eliminating certain state or local taxpayer-funded incentives.

Is there bipartisan support for data center regulations at the Statehouse?

Yes, there is bipartisan support for data center regulations at the Statehouse, with lawmakers from both parties expressing interest in new legislation to address concerns.

What economic benefits do data centers bring to South Carolina?

Data centers bring economic benefits to South Carolina by attracting substantial investments from major technology companies, boosting local property tax receipts, and creating specialized jobs. They are also considered essential for the 21st-century economy and AI growth.

How do data centers impact energy consumption Nationwide?

Nationwide, electricity demand from data centers doubled from 1.9% of total U.S. electricity consumption in 2018 to 4.4% in 2023, with forecasts predicting these will demand between 6.7% to 12.0% of total U.S. electricity by 2028.

What is the “Data Center Responsibility Act”?

The “Data Center Responsibility Act” is proposed legislation in South Carolina that would require data centers to operate with complete energy independence, prohibit surface or groundwater removal, require at least one employee per 1,000 feet of floor space, and prohibit direct or indirect state or local taxpayer-funded incentives for their primary benefit.

Key Features of Data Center Regulation Discussion in South Carolina

Feature	Description	Scope
Energy Consumption	Data centers consume significant electricity, with Nationwide demand projected to reach 6.7% to 12.0% of total U.S. electricity by 2028. This raises concerns about rising residential utility bills in South Carolina.	State-level, Nationwide
Water Usage	Large data centers require substantial water, prompting concerns about strain on surface and groundwater supplies in South Carolina.	State-level
Proposed Regulations (Sen. Davis)	Requires data center operators to pay all energy and infrastructure costs, mandates “closed-loop” water recycling technologies, and imposes siting, noise, and light regulations.	State-level
Proposed Regulations (Rep. Cromer’s “Data Center Responsibility Act”)	Mandates complete energy independence, prohibits surface or groundwater removal, requires specific employee-to-floor space ratio, and eliminates state/local taxpayer-funded incentives.	State-level
Tax Incentives	From 2015 to 2024, data centers received approximately 53% of South Carolina’s state incentives. There are ongoing debates about the fairness and necessity of these incentives.	State-level
Economic Impact	Data centers attract significant investments and create jobs, boosting local economies in South Carolina, but also raise concerns about their net benefit versus resource strain.	State-level
Bipartisan Support	There is widespread bipartisan interest in the South Carolina Statehouse to develop effective regulations for data centers.	State-level