It’s a hot summer, electricity bills are climbing but this trend isn’t seasonal. Costs are on the rise even outside of peak season. Since 2021, electricity prices have jumped nearly 40% (8% since the start of this year)—adding hundreds of dollars to the average household’s annual expenses.

What’s behind the surge?

Data centers. As the backbone of AI operations, these facilities consume vast amounts of electricity (and clean water). As shared in our previous post, expectations are for this to continue. By 2030, it’s estimated that data centers alone will use more electricity than entire nations like Japan, Brazil, Germany, or Canada.

This surge adds to existing electricity usage. According to the U.S. Energy Information Administration, residential customers account for 37% of electricity use, followed by commercial (35%), industrial (26%), and transportation (<2%). Within the commercial segment, a wave of new data centers added $9.3 billion in electricity costs to just one major U.S. power grid (PJM Interconnection). That’s not a small number and it’s only expected to rise. 

Tech giants like Microsoft, Amazon, and others have already struck deals with utilities to lock in the massive power they’ll need to run their AI models. xAI just bought a power plant from overseas and are shipping it to the US because they couldn’t get a new one built in time. 

While that may be a smart move for business, it could come at a cost for everyday consumers. Because when energy-hungry data centers draw from the same limited grid, prices rise for everyone. Even as general inflation cools, electricity costs are climbing. Still, electricity makes up only about 2.5% of the total inflation number.

If energy costs continue climbing, alongside housing and other essentials, more expensive power could stretch budgets even further. Now is a great time to save just a little bit extra, if possible. Personally, pricing out those solar panels that have been considered multiple times might be timely.