The Las Vegas Data Center Market

The Las Vegas Data Center Market

The Las Vegas data center market has become popular for many of the same reasons as markets like Phoenix or Denver. Las Vegas is located in close proximity to other primary West Coast markets, like Silicon Valley, but offers lower power costs, more available land, and fewer natural disaster risks. This makes Las Vegas attractive as a disaster recovery location for users with existing West Coast data centers, or for users wanting to establish a western presence, but don’t want to locate in Silicon Valley.

Much of Las Vegas’ data center growth has been caused by heavy development from Switch, the largest data center provider in the area. Switch operates nearly 180 MW across six data centers in Las Vegas, with two additional facilities under construction adding 45 MW of power. Other providers present in Las Vegas include EdgeConneX, Cyxtera, zColo, and Peak10/ViaWest, who operates approximately 10 MW between three data centers.

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Power Overview

Las Vegas’ primary power provider is NV Energy. While Las Vegas’ fuel mix comes primarily from natural gas, the arid climate enables data center providers to also utilize solar generation. Switch has commissioned a 180 MW solar farm from NV Energy to power their data centers with 100% renewable energy. Data center power costs in Las Vegas average between $.07-.08/kWh.

Tax Incentives Overview

Nevada offers a potential personal property and sales and use tax for data center companies located in the state. Data centers that create 10 or more full time jobs and at least $25 million in assets within 5 years are eligible for a 10-year tax abatement period, and a 20-year abatement period if they create 50 or more full-time jobs and $100 million in assets. Companies that qualify can receive a 75% cut off property taxes, and receive a 2% sales tax on eligible machinery and equipment purchases.

Hazard Risk Overview

Las Vegas is located in the United States’ safe zone, with almost no risk of floods, hurricanes, earthquakes, or tornadoes. Although rain is scarce in Vegas, the occasional storm can bring the risk of flash floods, although few have been damaging.

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