2026 Outlook: Power Is No Longer a Background Assumption
For decades, electricity was treated as a background input in real estate and industrial planning. Power showed up when needed, costs moved gradually, and reliability was largely assumed. That era is over.
As we enter 2026, power has moved from a passive utility to an active constraint—one that is reshaping development timelines, operating economics, and investment risk across industrial, logistics, and data-driven real estate.
Demand Is Not Slowing—It Is Reshaping the System
Electricity demand remains structurally high, driven by two forces that are not cyclical. Data centers continue to expand in both scale and geographic reach, while electrification across transportation, manufacturing, and building systems accelerates baseline load growth.
These demand drivers are additive, not substitutive. They are layering new requirements onto a grid that was not designed for this pace or concentration of load. The result is not just higher consumption, but localized capacity constraints that affect where and how growth can occur.
In many regions, demand is no longer limited by market appetite—it is limited by power availability.
Incentives Are Narrowing as Timelines Tighten
At the same time demand remains elevated, the policy environment is becoming more time-sensitive. Solar incentives that have underpinned a large share of recent onsite generation projects are approaching a hard deadline. To qualify, construction must begin before July 4th.
For developers and owners, this compresses decision-making into an already constrained development window. Projects that are delayed by interconnection studies, utility upgrades, or financing uncertainty risk missing incentive eligibility altogether—materially changing project economics.
In 2026, timing is no longer just about delivery schedules. It directly affects capital structure and long-term operating cost.
Large Power Consumers Face Cost and Reliability Risk
For large electricity consumers, the issue is no longer simply price—it is volatility and predictability. Power costs are rising unevenly across markets, tariffs are becoming harder to forecast, and reliability concerns are increasingly visible to tenants and operators.
Outages that were once rare now carry outsized operational and reputational consequences. Capacity requests that would have been routine five years ago now trigger multi-year utility studies or expensive infrastructure upgrades.
For many operators, electricity has become a material business risk rather than a fixed overhead line item.
Real Estate Development Is Colliding with the Grid
New industrial and logistics development is increasingly constrained by power availability. Interconnection queues are lengthening, substation upgrade costs are rising, and utility timelines often conflict with lease commencement expectations.
These challenges translate directly into higher carrying costs, delayed revenue, and increased uncertainty during underwriting. In some markets, power availability has become a gating factor equal to zoning, entitlements, or transportation access.
The result is a widening gap between where development demand exists and where power can be delivered on a predictable timeline.
Power Is Now Infrastructure
The common thread across these challenges is simple: power can no longer be treated as an assumption. It must be planned, structured, and financed with the same discipline applied to other critical infrastructure.
In 2026, the most resilient projects are those that treat electricity as a strategic input—integrating onsite generation, storage, and controls to reduce dependency on constrained grids and stabilize long-term economics.
This is not about chasing novelty or technology for its own sake. It is about control, predictability, and speed in an environment where the grid alone cannot keep pace.
Looking Ahead
The energy transition is no longer theoretical, and grid constraints are no longer emerging risks—they are present realities. Developers, owners, and operators who plan for power early will preserve flexibility and protect value. Those who assume power will “show up” risk delays, cost overruns, and missed opportunities.
In 2026, power is no longer a background assumption. It is a defining variable.