Charleston, SC, January 29, 2026
The data center industry in South Carolina is booming, attracting significant investments and technological advancement. However, concerns around resource consumption have prompted bipartisan discussions among lawmakers regarding regulations. With new legislation proposed to foster responsibility and sustainability, South Carolina aims to balance economic growth with community well-being. Local initiatives further emphasize the importance of aligning development with existing infrastructure requirements, marking a progressive approach to regional economic development.
Charleston, SC – The dynamic landscape of business and technological innovation continues to shape the economic future of the Lowcountry and broader South Carolina. A key player in this evolution is the burgeoning data center industry, attracting significant private investment and bringing advanced technological infrastructure to the state. These facilities, vital for the 21st-century economy, embody entrepreneurial spirit by enabling the digital services that power modern commerce and communication.
However, rapid growth often necessitates thoughtful adjustments to existing frameworks to ensure long-term prosperity and community well-being. State lawmakers are currently engaged in a significant discussion regarding the regulatory environment for data centers, demonstrating a bipartisan commitment to balancing economic growth with responsible resource management. This proactive approach aims to refine policies that support business expansion while safeguarding the interests of South Carolina entrepreneurs and residents alike.
South Carolina’s Digital Frontier: A Magnet for Innovation
South Carolina has cultivated a business climate that attracts substantial investment in the digital infrastructure sector, significantly contributing to the Charleston County economy and overall Lowcountry economic growth. The state currently hosts 16 global data centers, with more in development. This growth is fueled in part by a strong State-level incentive structure that includes a 100% sales tax exemption on computer equipment used in data centers. Recent enhancements to this program reduced the minimum job requirement for qualifying projects from 100 to 25 and the capital investment threshold from $300 million to $50 million. Additionally, the State supports sales tax exemptions on electricity consumption for these facilities. These strategic incentives have made South Carolina a destination for hyperscale providers, including industry leaders like Google and Meta, who have established significant operations within the region.
The economic benefits extend beyond large corporate investments. Data centers generally create 30 to 50 high-paying jobs and can generate substantial property tax revenue for local communities, whether in urban or rural settings. These facilities represent a modern form of private investment that underpins the Charleston SC business environment by providing essential infrastructure for the digital age.
Emerging Concerns: Energy, Water, and Community Impact
While data centers offer significant economic advantages, their rapid proliferation has prompted concerns regarding resource consumption and potential community impacts at a State-level. A single data center can consume enough electricity to power 125,000 homes on average. Nationwide, data centers consumed 4% of the total electricity in the U.S. in 2022, a figure projected to rise to 6% by 2026. Some studies project that electricity bills for consumers and small businesses in South Carolina could increase by 50% to 70% due to the surging energy demand from AI data centers. In response to this, the board at the State-owned power company, Santee Cooper, has voted to implement higher rates for major power users consuming 50 megawatts or more, a measure designed to prevent these increased costs from being passed on to regular consumers.
Beyond energy, there are concerns about water usage and the environmental footprint of these facilities. State Senator Tom Davis has highlighted the need for checks and balances to protect local communities, noting that while data centers provide considerable property tax revenue, their siting decisions may not always be environmentally responsible or consider existing infrastructure limitations, such as transmission lines or groundwater availability. There is a growing sentiment among residents and policymakers that while embracing technological innovation, South Carolina must ensure that this growth is sustainable and does not burden taxpayers or strain natural resources.
Bipartisan Momentum for Responsible Growth
The imperative to address these concerns while continuing to foster a robust economy has led to encouraging bipartisan cooperation among State-level lawmakers. Charleston Democratic Sen. Ed Sutton is co-sponsoring a data center bill with Senate Majority Leader Shane Massey, a Republican from Edgefield. This collaborative effort aims to protect ratepayers, enhance transparency in water usage, and limit certain tax incentives for data centers. Sen. Sutton has described the broad support for new regulations in the Senate as a refreshing bipartisan issue.
Similarly, in the House, Rep. April Cromer, a Republican from Anderson and a member of the S.C. Freedom Caucus, has observed a parallel dynamic, with members from both parties expressing interest in her bill, dubbed the “Data Center Responsibility Act”. This widespread interest underscores a shared recognition across the political spectrum that strategic, forward-thinking regulation is essential for sustainable economic development in South Carolina, benefiting Charleston small business and large enterprises alike.
Proposed Legislative Solutions: Strengthening the Framework
The legislative efforts underway propose several key changes to the existing framework governing data centers in South Carolina. Rep. Cromer’s “Data Center Responsibility Act” is among the more comprehensive proposals introduced. Her bill would require data centers to generate all their energy on-site, effectively making them energy independent, and prohibit the removal of surface or groundwater. It also mandates a minimum of one full-time, on-site employee for every 1,000 square feet of facility floor space. Furthermore, the proposed legislation seeks to prevent data centers from receiving direct or indirect State or local taxpayer-funded incentives, grants, tax abatements, subsidies, utility rate reductions, or infrastructure improvements primarily for their benefit.
Other discussions revolve around long-term power purchase agreements (PPAs). While data centers have expressed interest in 10-20 year PPAs, there is legislative interest in establishing 40-year PPA contract minimums, removing tax incentives for data center investments, and requiring water usage reporting. Such measures could protect ratepayers from potential rate hikes. While the South Carolina House previously attempted to block reduced electric rate deals for these centers, that effort did not pass the Senate. These proposals reflect a multifaceted approach to ensuring that the economic benefits of data centers are realized without disproportionately burdening residents or public resources.
Local Governance: Proactive Steps for the Charleston County Economy
The dialogue at the Statehouse is mirrored by proactive measures at the local level, demonstrating a commitment to responsible growth within the Charleston County economy and beyond. The city of Gaffney, for example, is taking steps to approve a new zoning classification specifically for data centers. This local ordinance would require data centers seeking to build in the city to provide written verification from the Gaffney Board of Public Works that power and water infrastructure are sufficient to accommodate the increased demand. This forward-thinking approach aims to protect citizens’ property rights and strategically limit where data centers can operate, preventing potential conflicts with residential or commercial areas. Such local initiatives are crucial for guiding Lowcountry economic growth and ensuring that new developments align with community needs and existing infrastructure capabilities.
Conclusion
The conversation surrounding data center regulations in South Carolina represents a vital effort to harmoniously integrate technological advancement with community stewardship. The bipartisan traction on this issue highlights a shared vision for a future where entrepreneurial innovation and private investment can flourish, while also ensuring the prudent management of essential resources and the protection of citizens’ interests. As Charleston SC business continues to grow, maintaining this delicate balance through thoughtful, evidence-based policy will be paramount to the sustained prosperity of South Carolina entrepreneurs and all residents. We encourage all Lowcountry residents to stay informed and engaged in these important discussions shaping our economic future.
Frequently Asked Questions
What are the current State-level tax incentives for data centers in South Carolina?
South Carolina offers a 100% sales tax exemption on computer equipment used in data centers. To qualify for this State-level exemption, data center facilities must be certified by the South Carolina Department of Commerce and meet specific requirements, including investing at least $50 million in real and/or personal property over five years and creating and maintaining at least 25 full-time jobs with an average cash compensation of 150% of the State or county per capita income, whichever is lower.
What are the primary concerns driving new data center regulations in South Carolina?
Primary concerns driving new State-level data center regulations include the significant energy consumption of these facilities, which could potentially raise electricity bills for residential consumers and small businesses, and issues related to water usage and the environmental impact of their operations. There is also a focus on ensuring that communities are not burdened by infrastructure demands or environmentally irresponsible siting decisions.
Are there bipartisan efforts to regulate data centers in South Carolina?
Yes, there are bipartisan efforts to regulate data centers at a State-level in South Carolina. Charleston Democratic Sen. Ed Sutton is co-sponsoring a data center bill with Senate Majority Leader Shane Massey (R-Edgefield). Additionally, Rep. April Cromer (R-Anderson) has introduced the “Data Center Responsibility Act,” which has garnered interest from members of both parties in the House.
What are some of the key proposals in the “Data Center Responsibility Act” in South Carolina?
The “Data Center Responsibility Act” in South Carolina proposes that data centers generate all their energy on-site, prohibit the removal of surface or groundwater, and mandate at least one full-time employee per 1,000 square feet of facility floor space. The bill also aims to prevent data centers from receiving direct or indirect State or local taxpayer-funded incentives, grants, tax abatements, subsidies, utility rate reductions, or infrastructure improvements primarily for their benefit.
How are local communities responding to the growth of data centers in South Carolina?
Local communities in South Carolina are taking proactive steps, such as the city of Gaffney creating new zoning classifications specifically for data centers. These local ordinances require data centers to verify that sufficient power and water infrastructure exists to support their operations, aiming to protect citizens’ property rights and manage local resources effectively.
Key Features of Data Center Regulation Discussions in South Carolina
| Feature | Description | Geographic Scope |
|---|---|---|
| Existing Tax Exemption | 100% sales tax exemption on computer equipment and supported sales tax exemption on electricity for certified data centers. | State-level |
| Investment Threshold | Minimum $50 million investment in real and/or personal property over 5 years to qualify for exemptions. | State-level |
| Job Creation Requirement | Minimum 25 full-time jobs created and maintained, with average cash compensation 150% of State or county per capita income. | State-level |
| Energy Consumption Concerns | A single data center can power 125,000 homes. Potential for 50-70% electricity bill increases for residents/small businesses due to AI data center demand. | State-level |
| Water Usage Concerns | Focus on transparency and potential restrictions on surface or groundwater removal. | State-level |
| Bipartisan Legislative Efforts | Sen. Ed Sutton (D) and Sen. Shane Massey (R) co-sponsoring bills; Rep. April Cromer’s (R) “Data Center Responsibility Act” gaining bipartisan interest. | State-level |
| Proposed On-site Energy Generation | Requirement for data centers to generate all their energy on-site for energy independence. | State-level |
| Proposed Job Mandate (Cromer’s Bill) | At least one full-time, on-site employee per 1,000 square feet of facility floor space. | State-level |
| Proposed Incentive Limitations | Prohibition on direct or indirect taxpayer-funded incentives, grants, tax abatements, or utility rate reductions primarily benefiting data centers. | State-level |
| Local Zoning Initiatives | Cities like Gaffney are implementing new zoning classifications requiring verification of sufficient power and water infrastructure for data centers. | Local-level |
Deeper Dive: News & Info About This Topic
HERE Resources
Charleston Shoppers Adapt: Thrift Stores Signal Shifting Economic Tides
Charleston’s Economic Horizon: Insights into Local Business Dynamics
Charleston Takes Action Against Human Trafficking
South Carolina Lawmakers Seek Balance in Data Center Regulations
Timber Pizza Co. Plans Southern Expansion in Charleston
Charleston Real Estate: Growth & Opportunity Abound
Charleston Supports Entrepreneurs with SBDC Initiatives
Charleston and South Carolina Focus on Energy-Driven Growth
Flu Surge Hits South Carolina as Students Return to Classrooms
Allison Prang Joins Bloomberg Law as Senior Reporter
