Green Data Center Market Size, Share, Forecast, & Trends Analysis by Offering (Solution (Cooling/HVAC), Services), Deployment, Data Center Size, End User (Network Providers, CSPs, Enterprises (E-commerce, BFSI, Telecommunications))—Global Forecast to 2031

The Green Data Center Market was valued at $71.8 billion in 2023. This market is expected to reach $268.1 billion by 2031 from an estimated $83.6 billion in 2024, at a CAGR of 18.1% during the forecast period of 2024-2031.

Green Data Center Market Size & Forecast

The growth of this market can be attributed to several factors, including the growing adoption of cloud services and IoT applications, rising data center energy consumption, and increasing government regulations and sustainability initiatives. Additionally, the increasing availability and affordability of renewable energy sources and the expansion of edge computing infrastructure is expected to create market growth opportunities. However, high initial capital investment may restrain the growth of this market. However, the implementation of energy-efficient cooling systems is a major challenge for the players operating in this market.

Additionally, the growing adoption of liquid cooling technologies and AI-powered energy management systems is a key trend in the Green Data Center market.

Key Findings in the Green Data Center Market

• By Offering: The Solution Segment is Expected to Dominate the Green Data Center Market in 2024
• By Deployment Mode: the Cloud-based Deployments Segment is Expected to Dominate the Green Data Center Market in 2024
• By Data Center Size: the Hyperscale Data Centers Segment is Expected to Dominate the Green Data Center Market in 2024
• By End User: the Cloud Service Providers (CSPs) Segment is Expected to Dominate the Green Data Center Market in 2024
• By Geography: North America to Dominate the Green Data Center Market in 2024

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Green Data Center Market Drivers

Increasing Government Regulations and Sustainability Initiatives

As the world confronts the urgent need to reduce carbon emissions, organizations are facing increasing pressure to comply with stringent regulations. Governments worldwide, particularly in countries like Germany, the U.K., and the U.S., are setting ambitious targets for achieving carbon neutrality. For example, the U.K. has established a bold goal of reducing greenhouse gas emissions by 100% by 2050. To support this target, the U.K. government has implemented a range of policies outlined in two key publications: the Net Zero Strategy (2021) and Powering Up Britain: The Net Zero Growth Plan (2023). These policies compel organizations to take swift, decisive action to align their operations with environmental standards.

Many companies in this sector are now focused on developing innovative solutions to enhance energy efficiency, increase capacity, and reduce latency in data centers, contributing to the goal of a carbon-neutral society. This includes leveraging renewable energy sources such as wind and solar power, adopting advanced cooling technologies like liquid cooling, and utilizing modular infrastructure designs that support scalable and sustainable growth. These factors, combined with the rising sustainability initiatives and cross-sector collaboration to address the growing power consumption of data centers, are driving market growth.

Growing Adoption of Cloud Services and IoT Applications

Many organizations are increasingly migrating to cloud-based platforms, driving the demand for scalable and energy-efficient data infrastructure to manage fluctuating workloads. Cloud computing technology often utilizes densely packed server configurations optimized for large-scale data processing and storage, resulting in higher power densities and significant heat generation. To tackle these challenges, data center operators are adopting sustainable solutions, including advanced power systems, monitoring and management systems, networking systems, and cooling/HVAC systems.

For example, liquid cooling systems offer modular solutions that can be easily expanded or reconfigured to meet changing requirements, allowing cloud providers to optimize performance while reducing energy consumption. Additionally, IoT applications generate vast amounts of data from interconnected devices, necessitating data centers capable of efficiently processing and storing this information. Green data centers address these demands with energy-efficient technologies that minimize carbon footprints while ensuring secure and reliable operations. The integration of renewable energy sources such as solar, geothermal, hydroelectric, and wind power further enhances the sustainability of these facilities. Together, these factors, along with the rising energy consumption in data centers, are expected to accelerate the demand for green data centers in the coming years.

Green Data Center Market Trends

Increasing Adoption of Liquid Cooling Technologies

Today, data centers face high power consumption and heat generation, especially with the rise of high-performance computing (HPC), 5G technology, artificial intelligence (AI), big data analytics, machine learning, and cloud services. Traditional air-cooling systems are becoming less efficient in managing these energy-intensive operations. Thus, data center operators are evaluating liquid cooling technologies to increase energy efficiency as processing-intensive computing applications grow. Liquid cooling technologies offer a more effective solution by directly absorbing and dissipating heat from servers and IT equipment. Liquid cooling leverages the higher thermal transfer properties of water or other fluids to support efficient and cost-effective cooling of high-density racks. It can be up to 3000 times more effective than using air. These systems enable data centers to handle more processing power while minimizing their carbon footprint. The adoption of liquid cooling technologies is becoming a vital strategy for green data centers, as major players and government organizations are prioritizing carbon reduction, energy-efficient operations, and aligning with global sustainability initiatives.

Some of the developments in this marketplace are as follows:

• In April 2024, Accelsius Inc. (U.S.) launched its two-phase, direct-to-chip liquid cooling technology, NeuCoolTM system, for data centers. The NeuCoolTM solution provides data center operators with an estimated ~50% savings in energy costs and around 80% reduction in Co² emissions.
• In January 2024, Aligned Data Centers (U.S.) launched a new liquid cooling technology called DeltaFlow. According to the company, this solution is designed to cater to the high-density computing requirements of next-generation applications and high-performance computing (HPC), including artificial intelligence (AI), machine learning (ML), and supercomputers.
• In November 2023, LiquidStack (U.S.), a provider of data center liquid cooling solutions, launched its new single-phase liquid cooling solution to expand into the DataTank product portfolio.
• In October 2023, ThermalWorks (U.S.) launched its waterless cooling system built for the fast-changing data center industry. It is designed to handle the ever-increasing density loads required by artificial intelligence and high-performance GPU-based computing. The system supports densities of up to 70 kW per rack with air cooling and up to 200 kW per rack with plug-and-play liquid cooling integration.

These developments, coupled with the increasing demand for efficient and secure data storage solutions and the growing trend toward outsourced IT infrastructure, are driving market growth in the coming years.

Green Data Center Market Opportunities

Increasing Availability and Affordability of Renewable Energy Sources

As the data center industry accounts for approximately 1% of global energy consumption, the urgency to adopt more efficient and sustainable solutions to mitigate energy use and environmental impact has intensified. Integrating green energy alternatives is a crucial aspect of enhancing data center sustainability. Key renewable energy sources that data center operators are investing in globally include solar, wind, geothermal, hydrogen fuel cells, microgrids, and hydroelectric power. These alternatives reduce reliance on traditional fossil fuels, help operators comply with stricter environmental regulations, support corporate sustainability goals, enhance energy efficiency, and contribute to long-term environmental sustainability objectives.

In recent years, the cost of renewable energy has significantly decreased, making it more accessible for data center operators. Solar and wind power have experienced reductions in cost due to technological advancements and economies of scale. Additionally, the stability of renewable energy prices, compared to the volatility of fossil fuels, further incentivizes operators to adopt these green alternatives. Major market players are increasingly focused on integrating advanced solutions with renewable energy sources, such as solar power, to help data centers reduce their reliance on fossil fuels, thereby lowering carbon emissions and operating costs.

For example, in April 2024, Exowatt (U.S.) launched Exowatt P3, a modular energy module designed specifically for energy-intensive data centers. This innovative solution harnesses solar energy through specialized lenses and stores it in a long-duration sensible heat battery, providing both electricity and high-temperature thermal energy at a cost of just under $0.04 per kWh. Such developments, alongside the growing need to enhance energy efficiency, comply with regulatory requirements, and align with global carbon neutrality efforts, highlight the expanding opportunities within the green data center market in the coming years.

Green Data Center Market Analysis: Top Market Opportunity:

The Solution Segment is Expected to Dominate the Green Data Center Market in 2024

Based on offering, the green data center market is segmented into solutions and services. The solution segment is further segmented into power systems, monitoring & management systems, cooling/HVAC systems, networking systems, and server & storage systems. The serviced segment is further segmented into training & support, installation & deployment, and maintenance & support. In 2024, the solution segment is estimated to account for the largest share of the green data center market. The substantial share of this segment is attributed to the growth of cloud computing and AI technologies, the rising demand for energy-efficient power systems to reduce operational costs, and the increasing need for scalable infrastructure. Additionally, the adoption of eco-friendly cooling and HVAC systems to comply with environmental regulations and the growing requirement for advanced real-time monitoring tools to optimize energy use and performance in data centers are significant factors driving this segment's expansion.

However, the services segment is slated to register the highest CAGR during the forecast period. The growth of the services segment in the coming year is supported by the increasing complexity of data center systems, the need to ensure optimal performance and energy efficiency in green data centers, and the rising demand for installation and deployment services to ensure compliance with sustainability standards. Additionally, the growing need for maintenance and support services to keep data centers operational and energy-efficient further contributes to this segment's growth.

Geographical Analysis

North America Dominates the Green Data Center Market in 2024

In 2024, North America is estimated to account for the largest share of the global green data center market. Stringent government carbon emission regulations and sustainability mandates, high energy costs in the region, and the rapid expansion of cloud computing and AI-based services primarily drive this substantial share. Additionally, increasing investments in eco-friendly data center solutions, the integration of renewable energy into data centers, and growing government incentives for green infrastructure further contribute to this segment's dominance.

However, Asia-Pacific is slated to register the highest CAGR during the forecast period. The region is rapidly advancing in green initiatives and renewable energy, driven by rising investments from tech companies and government efforts focused on energy efficiency. Market growth is fueled by several factors, including increased investments in data center expansion, the need to lower operating costs through energy-efficient systems, greater availability of renewable energy sources, and the swift pace of digital transformation. Furthermore, government initiatives in countries such as China, Japan, Australia, and India aimed at reducing carbon emissions and promoting renewable energy adoption in data centers are significant contributors to this growth.

Key Companies

The report features a competitive landscape derived from a comprehensive analysis of the key strategic developments that market participants have undertaken over the past three years (2021-2024). The key players profiled in the global green data center market report are Dell Technologies Inc. (U.S.), Fujitsu Limited (Japan), Cisco Systems, Inc. (U.S.), Hewlett Packard Enterprise Company (U.S.), Hitachi Energy Ltd (Switzerland) (a subsidiary of Hitachi, Ltd. (Japan)), Schneider Electric SE (France), IBM Corporation (U.S.), Eaton Corporation plc (Ireland), Vertiv Group Corporation (U.S.), Green Revolution Cooling, Inc. (U.S.), ABB Ltd (Switzerland), GE Vernova Inc. (U.S.), Delta Electronics, Inc. (Taiwan), Digital Realty Trust Inc. (U.S.), Equinix, Inc. (U.S.), Huawei Technologies Co., Ltd. (China), Ark Data Centres Limited (U.K.), and Iron Mountain, Inc. (U.S.).

Green Data Center Industry Overview: Latest Developments from Key Industry Players

• In August 2024, Singtel Group (Singapore) and Hitachi, Ltd. signed a Memorandum of Understanding (MOU) to collaborate on next-generation data centers and GPU Cloud in Japan, with potential expansion into the broader Asia Pacific region. This strategic partnership aims to leverage Singtel's extensive expertise in data centers and connectivity alongside Hitachi's unique capabilities for end-to-end data center integration, which includes green power solutions, cooling systems, storage infrastructure, and data management.
• In November 2023 , Vertiv Group Corporation (U.S.) launched the Vertiv™ TimberMod variant of its Vertiv™ Power Module and SmartMod™ families. This variant features mass timber as a key structural component instead of steel for prefabricated modular (PFM) data center solutions.​ Vertiv™ TimberMod helps support customers' sustainability objectives by using a more environmentally friendly material that can minimize resource depletion and lower CO2 emissions.
• In October 2023, Green Revolution Cooling, Inc. (U.S.), DCV Industries (UAE), and Dell Technologies Inc. (U.S.) partnered to deliver advanced immersion-cooled modular data centers to the Middle East region. This collaboration seeks to provide organizations with a comprehensive solution that significantly lowers data center construction, maintenance, and power costs compared to traditional air-cooled facilities.
• In October 2023, ThermalWorks (U.S.) launched its waterless cooling system built for the fast-changing data center industry. It is designed to handle the ever-increasing density loads required by artificial intelligence and high-performance GPU-based computing. The system supports densities of up to 70 kW per rack with air cooling and up to 200 kW per rack with plug-and-play liquid cooling integration.
• In May 2023, Sonic Edge (U.K.) partnered with Deep Green Technologies Limited (U.K.) to lower customers' power costs through immersion cooling technologies. This collaboration will support Sonic Edge in launching 50 new HPC/EdgePods across the U.K. by 2024.

Green Data Center Market Research Summary

Key questions answered in the green data center market report: