How Power Infrastructure Impacts Property Values
- Craig Kaiser
- Aug 29
- 6 min read
In today's technology-driven economy, power infrastructure has emerged as one of the most significant factors influencing land values across the United States. What once seemed like mundane utility lines and substations now represent critical assets that can multiply property values overnight. The explosive growth of data centers, renewable energy projects, and electric vehicle infrastructure has created unprecedented demand for properties with robust electrical capacity, fundamentally changing how investors evaluate land opportunities and how land owners assess their property's value.
Setting the Stage: Factors that Impact Property Value
Property values are shaped by a variety of factors, typically categorized into location, property features, and market dynamics. Location plays a pivotal role in influencing property value, with proximity to amenities and the overall appeal of the neighborhood greatly influencing a property’s worth. Key property features such as size, condition, and upgrades are equally important in determining value. Lastly, market dynamics, like supply and demand, interest rates, and the state of the economy, affect how much buyers are willing to pay.
How Power Infrastructure Impacts Property Values
The impact of energy infrastructure on property values depends on the specific type of property. Residential properties located on or near power lines tend to experience lower home values, but the presence of power lines on vacant land or commercial properties can significantly increase their value.
Residential Properties: High-voltage power lines can have a negative impact on property values, though the degree of this effect depends on factors such as proximity, visibility, market conditions, and buyer perceptions. Generally, high-voltage transmission lines cause a greater decline in property values compared to lower-voltage lines. Homes situated very close to these high-voltage lines often see the steepest drops in value, with studies indicating decreases ranging from 2% to over 10%. However, this impact lessens as the distance from the power lines increases.
Commercial Properties: The influence of energy infrastructure on commercial property value is typically neutral to positive, except in cases where curb appeal is a critical factor. Commercial buyers, whether in retail, industrial, or office sectors, tend to prioritize functionality over aesthetics or perceived health concerns. In fact, reliable access to power is often considered an advantage, particularly for energy-intensive industries such as data centers, manufacturing facilities, or cannabis cultivation. Proximity to substations can even enhance property value when consistent electricity supply is essential.
Vacant Land: The impact of nearby power lines or substations on vacant land value depends on zoning and intended use. For residential developments, this proximity is often a drawback, reducing buyer demand and lowering land value. However, for industrial or energy-related projects, it can be an advantage. Access to existing electrical infrastructure may boost land value, especially for facilities like data centers, industrial operations, or renewable energy projects such as solar or wind farms. Since installing electricity on rural land can be costly, having power access already available is a significant benefit.
Electrical Infrastructure Components That Drive Value
The proximity of a property to electrical infrastructure plays a critical role in determining the availability, reliability, and cost-efficiency of power. Properties located closer to power infrastructure experience fewer disruptions, reduced transmission losses, and easier connection processes, making them more attractive for development and economic activities. Access to a reliable and consistent power supply is essential for all types of properties- residential, commercial, or industrial- supporting everything from home charging stations to large-scale renewable energy projects.
Assessing the potential of electrical infrastructure requires a thoughtful evaluation of several key factors. While proximity to transmission lines and substations is paramount, other considerations, such as available capacity, voltage levels, and connection costs, are equally important. Properties situated within 1-2 miles of major substations are particularly well-suited for projects like data centers and renewable energy installations, offering cost-effective and efficient solutions. On the other hand, sites requiring the construction of new transmission lines often face significantly higher development costs, which can render some projects financially unfeasible.
The Data Center Boom: When Power Becomes King
The data center boom exemplifies how electrical infrastructure can transform land values virtually overnight. These massive facilities require enormous amounts of reliable power, often 20-100 megawatts or more for large installations, making proximity to electrical infrastructure the primary site selection factor. Properties within a few miles of major electrical substations that previously sold for agricultural values of $5,000-8,000 per acre can suddenly be worth $25,000-75,000 per acre or more when identified as suitable for data center development. This dramatic value increase occurs not because the land's physical characteristics changed, but because its electrical infrastructure capacity was finally recognized and valued appropriately.
Curious if your property is suitable to host a data center? Get a free LandApp Property Report and check out the Data Center Value Index Score, which rates your property's suitability for a data center on a scale of 0 to 100. If you're interested in receiving above-market-value offers to lease or sell your property for a data center after getting your free Property Report, you can list your property for lease or for sale on LandApp's marketplace with no obligations to accept any offers from data center developers.
The data center industry's growth shows no signs of slowing. Cloud computing, artificial intelligence, and increasing digitization of business operations drive continuous demand for new facilities. Major technology companies like Amazon, Microsoft, and Google are actively seeking sites with sufficient electrical capacity to support their expanding server farms, creating a competitive market for properties with the right infrastructure characteristics.
Austin, Texas: Tech Hub Transformation
Texas's deregulated electricity market encourages infrastructure investment, while its business-friendly environment attracts data center and industrial development. Austin's massive electrical grid investments in the early 2000's helped transform it into a major technology center with many active and planned data centers. As of August 2025, there are over 50 data centers operating or planned in Austin.
Companies with data centers in Austin, TX include colocation providers like CyrusOne, Digital Realty, Data Foundry, and Lumen, as well as tech giants Amazon, Microsoft, and Google with their own large-scale facilities
Tech companies chose Austin partly due to reliable power infrastructure
The long-term impact of data center construction is a driver of increased demand and potential rising property values, as the influx of workers can boost the local housing market
Northern Virginia: Data Center Boom
The data center corridor in Northern Virginia, known as "Data Center Alley," shows how specialized electrical infrastructure can create entirely new property markets. For example, Dominion Energy's targeted investments in high-capacity transmission lines transformed former farmland into some of the nation's most valuable real estate.
Land suitable for data centers in Northern Virginia typically sells for over 50% market value
The presence of fiber optic networks and electrical capacity has increased industrial property values in the region by over 200%
Data centers in Loudoun County have increased tax revenue by an estimated $890M
Renewable Energy and Electrical Infrastructure
Renewable energy facilities, particularly large solar and wind installations, require substantial electrical infrastructure that can benefit surrounding properties. Solar and wind farms require connection to transmission systems, making properties near existing electrical infrastructure more valuable for renewable energy development. As utilities invest in grid upgrades to accommodate renewable energy, nearby properties may gain development potential through improved electrical infrastructure access.
Energy storage facilities represent another emerging opportunity tied to electrical infrastructure. Battery storage systems help stabilize electrical grids and typically locate near existing substations or transmission lines. These facilities require less land than solar or wind projects but can generate significant lease income for property owners. As a result of the data center and renewable energy boom, there has been a battery storage boom, with these facilities becoming more common across the nation.
Evaluating Your Property's Energy Infrastructure Access
Getting a free Property Report through LandApp by finding your parcel on our map or mobile application instantly reveals your property's proximity to critical electrical infrastructure and provides estimated development potential based on power availability and other key factors within its proprietary Value Index Scores. Within the Solar and Wind Value Index Scores, you can view a parcel's proximity to transmission lines and substations.
For serious investors and land professionals, LandApp Pro offers unlimited Property Reports for just $6 per month, complete with in-depth parcel details and Value Index Scores for properties across the country.
