AI’s Energy Story & Building Business Energy Independence

How Businesses can help curb AI Energy Grid UseWhy AI’s Energy Story Should Push Businesses Toward Energy Independence

As businesses lean more on AI tools, like chatbots, automated analysis, or predictive systems, the energy demands of AI (Artificial Intelligence / LLMs) are quietly increasing. Google, for instance, has revealed that a median text prompt to its Gemini AI model uses about 0.24 watt-hours of electricity, comparable to running a microwave for one second (MIT Technology Review, 2025). This number might seem small, but when multiplied by thousands or millions of queries, it becomes significant.

The energy behind AI is more than just the computer chips; it includes power for CPUs, memory, idle backup hardware, and the data-center systems needed for cooling and power conversion. Google’s breakdown shows that support infrastructure consumes nearly as much electricity as the AI chips themselves. This illustrates that as AI adoption grows, so does the infrastructure footprint (MIT Technology Review, 2025).

Connecting AI Energy Demand to Business Infrastructure

AI’s rising energy demands expose businesses to grid variability, price spikes, and carbon risks. If every AI prompt has behind-the-scenes infrastructure, then businesses are effectively outsourcing energy cost and reliability risk to utility suppliers. On-site renewable energy, like solar energy storage systems, can offer predictable energy supply and buffering, reducing reliance on the grid. This gives companies control, resilience, and a lower environmental impact.

Make the Case for On-Site Renewable Energy

By investing in solar and energy storage, businesses can:

  • Offset AI power needs during peak compute periods.
  • Ensure uptime if the grid goes down or becomes costly.
  • Show environmental leadership, appealing to sustainability-minded customers and stakeholders.
  • Stabilize operational costs, since solar generation costs are more predictable than market electricity prices.

Use Current Tax Incentives to Your Advantage

Even with recent changes in federal rules, commercial businesses can still claim important tax credits for renewable energy installations, if they act now.

What’s Changed for Commercial Businesses?

Under the One Big Beautiful Bill Act (OBBBA), tax credits under Internal Revenue Code Sections 45Y (Production Tax Credit) and 48E (Investment Tax Credit) for wind and solar are ending early, effective for projects placed into service after December 31, 2027, unless construction begins before July 4, 2026 or the project is placed in service by end of 2027 (Renewable Energy World, 2025).

Moreover, new IRS and Treasury guidance (Notice 2025-42) tightens the rules: large-scale solar and wind projects must now perform physical work of a significant nature by July 4, 2026, rather than relying on a prior “5% investment” safe harbor to prove commencement of construction (Evergreen Action, 2025; Sidley Austin LLP, 2025). A continued four-year placement-in-service window remains, but the initial physical work requirement is stricter (Hogan Lovells, 2025).

However, small projects, like commercial rooftop solar under 1.5 MW, can still rely on the 5% safe harbor, easing eligibility constraints (The Washington Post, 2025).

What does this mean for businesses?

Start tangible work now: If a business plans a solar-plus-storage system, it should commence physical work—like ordering inverters, mounting racks, or ground work before July 4, 2026.

Secure the ITC or PTC: Projects that begin construction by that deadline, and are placed in service by 2027, remain eligible for the valuable tax credits. Act before guidance fully takes effect: The guidance becomes fully effective September 2, 2025, so work begun before that may still apply under prior rules (Hogan Lovells, 2025). In short, commercial entities can still benefit, especially if they move quickly and focus on smaller-scale or rooftop projects that meet the new criteria.

 

 

References

Evergreen Action. (2025, August 19). What the new tax credit guidance means for clean energy projects. Evergreen Action. https://www.evergreenaction.com/blog/what-the-new-tax-credit-guidance-means-for-clean-energy-projects

Hogan Lovells. (2025, August 19). US Treasury releases new “begin construction” guidance on clean energy tax credits. Hogan Lovells. https://www.hoganlovells.com/en/publications/us-treasury-releases-new-begin-construction-guidance-on-clean-energy-tax-credits

MIT Technology Review. (2025, August 27). Google reveals the energy used per Gemini query, including electricity, emissions, and water. MIT Technology Review. https://www.technologyreview.com/2025/08/28/1122685/ai-energy-use-gemini/

Renewable Energy World. (2025, August 18). Treasury issues new guidance on wind, solar tax credits under the OBBBA. Renewable Energy World. https://www.renewableenergyworld.com/energy-business/policy-and-regulation/treasury-issues-new-guidance-on-wind-solar-tax-credits-under-the-obbba

Sidley Austin LLP. (2025, August 18). The beginning of the end: IRS guidance issued on “beginning of construction” exception for wind and solar. Sidley. https://www.sidley.com/en/insights/newsupdates/2025/08/the-beginning-of-the-end-irs-guidance-issued-on-beginning-of-construction-exception-for-wind

The Washington Post. (2025, August 15). Treasury tightens rules for renewable energy tax credits; small projects may still qualify. The Washington Post. https://www.washingtonpost.com/climate-environment/2025/08/15/tax-credits-renewable-energy-projects