The Hurdle Rate Is Set in Washington
The zoning board decides where a data center sits. The tax code decides whether the power it needs gets built at all. That is the part practitioners underweight, because it is invisible on any map. A production credit does not appear in a substation photograph, yet it is the reason the wind farm feeding that substation cleared its financing committee. Learn to read the fiscal layer first. It is upstream of everything you can point at, and it moves on a legislative calendar you do not control. Treat federal policy as infrastructure, because it behaves like infrastructure with a shorter warranty.
Knowledge check
Why can federal tax credits determine whether a data center's power supply exists, even though the credits never touch the data center itself?
Show the answer
The credits lower the after-tax cost of capital for new low-carbon generation, which lowers the return that a wind, solar, or storage project must earn to be worth building. If the credit shifts, marginal projects that would have served new load stop clearing their financing hurdle, so the electrons the data center was counting on are never generated. The subsidy lands on the generator, but the availability of power lands on the load.