On May 21, 2025, Meta, the parent company of Facebook, Instagram, and WhatsApp, signed two long-term Power Purchase Agreements (PPAs) with AES Corporation to secure 650 MW of solar energy for its data centers in Texas (400 MW) and Kansas (250 MW). These projects, part of the Southwest Power Pool (SPP) market, support Meta’s expanding AI operations and its goal of 100% renewable energy, achieved operationally in 2020, with a broader net-zero emissions target by 2030. The deal adds to Meta’s 12 GW renewable portfolio and boosts local economies, but as AI-driven energy demand surges, can solar keep pace with the tech giant’s needs?

Details of the Deal

The PPAs, spanning 15-20 years, draw from solar projects AES is developing, set to start operations within 2-3 years. The SPP, covering 14 central U.S. states, ensures grid reliability for Meta’s data centers, which consume energy equivalent to small cities—ChatGPT-level models alone require 500 MW per data center, per industry estimates. AES, operating 32.7 GW globally with a 12.3 GW PPA backlog and 65 GW pipeline, is a key player, ranked a top clean energy provider by BloombergNEF for three years running.

“This partnership delivers fast, affordable renewable energy for Meta’s AI-driven growth,” said AES CEO Andrés Gluski.

Meta’s Urvi Parekh added, “These projects align with our 100% clean energy goal and add new grid capacity.”

The deal creates hundreds of construction jobs and millions in tax revenue for Texas and Kansas communities, supporting schools and local services. Texas, with 41 GW of solar capacity by 2024, leads the U.S. in solar growth due to abundant sunshine and quick permitting, while Kansas lags at 172 MW, making this a significant boost for its renewable sector.

Read more: Assent’s CBAM Compliance Solution: Streamlining Carbon Reporting for Manufacturers

Why It Matters

Meta’s energy needs are skyrocketing as AI workloads grow. Data centers globally consumed 460 TWh in 2022, projected to hit 945 TWh by 2030, per the IEA. Meta’s 650 MW deal, part of 9.8 GW planned U.S. renewable additions by 2025, offsets this demand with carbon-free power. Since 2020, Meta has matched all operational energy with renewables, and its Texas focus—adding 1,500 MW in 2025 alone—leverages the state’s solar boom.

This aligns with broader climate tech trends. Converge’s $22M for AI-driven concrete decarbonization and the EU’s CO2 storage mandates reflect a push for scalable solutions. Meta’s PPAs, unlike its Environmental Attribute Purchase Agreements (EAPAs) with Zelestra (595 MW) and Engie (460 MW), directly fund new solar farms, adding grid capacity rather than just buying credits. This supports U.S. solar growth, with corporate renewable purchases hitting 46 GW globally in 2023, led by tech giants.

Challenges and Risks

Scaling solar faces hurdles. AES’s projects require $500-$800 million in investment, with construction timelines vulnerable to supply chain delays—solar panel imports dropped 20% in 2024 due to tariffs, per SEIA. Grid integration is another bottleneck; SPP’s interconnection queue has 90 GW pending, with 30% facing delays past 2027. Kansas’s low solar base means infrastructure upgrades, adding 10-15% to costs.

Meta’s AI energy demand could outstrip renewable supply. A single data center may need 1 GW by 2030, per NVIDIA estimates, and while solar’s “fast time-to-power” (6-12 months for partial operation) helps, it’s intermittent. Meta may rely on gas or nuclear for baseload power, potentially undermining net-zero goals. Financially, AES faces risks; Jefferies downgraded its stock to Underperform in May 2025, citing $10 billion in debt and renewable sector uncertainties.

Policy shifts loom large. Trump’s 2025 agenda prioritizes fossil fuels, potentially slashing solar tax credits (30% under IRA), though Texas’s deregulated market shields some projects.

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What’s Next?

Meta’s deal brings its Texas solar commitments to 2,150 MW in 2025, with AES’s projects online by 2027-2028. AES’s 10.1 GW of hyperscaler contracts, including Microsoft’s 475 MW PPAs, positions it to capture 15% of the $50 billion corporate renewable market by 2030. Meta aims for 15 GW total renewables by 2027, per its sustainability report, likely targeting more PPAs in solar-rich states.

Globally, tech firms drive 60% of renewable PPAs, per BloombergNEF. The EU’s €992M hydrogen funding and Assent’s CBAM compliance tool show parallel efforts to decarbonize heavy sectors, but data centers’ 2% of global emissions (projected 4% by 2030) demand urgent innovation. Solar’s scalability makes it a cornerstone, but storage and grid upgrades are critical.

“This is about powering AI sustainably,” Parekh said. “We’re building the grid of the future.”

As Meta’s data centers expand, this deal sets a benchmark for tech’s renewable shift. Success hinges on execution—building farms, upgrading grids, and navigating policy turbulence. Will solar fuel AI’s rise, or will energy demands outrun green ambitions?

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