Massachusetts mandates clean energy for new data centers

Massachusetts just told the data center industry to pack its own lunch. Governor Maura Healey’s administration rolled out a framework requiring data center developers to fund and procure 100% clean energy for their operations, a policy the state is calling “Bring Your Own Clean Energy.” The mandate ensures that the cost of powering these facilities doesn’t get passed along to regular electricity customers or strain the state’s grid.

What the rules actually require

The framework, first released on June 25, 2026, does several things at once. It halted applications for a 20-year sales and use tax exemption that was established in 2024, which had been available to data center projects that created at least 100 jobs and committed a minimum $50 million investment. That exemption is now frozen until the state determines adequate ratepayer and environmental protections are in place.

Under the new model, data center operators must fund all infrastructure costs themselves while prioritizing on-site renewable energy generation.

On September 8, 2026, Healey signed an executive order requiring community approval through formal community benefits agreements for any data center project with peak demand exceeding 25 megawatts before it can even reach state-level review.

The state also established a Ratepayer Protection Fund, designed to collect payments from developers who fail to cover their full energy costs.

Why Massachusetts is doing this now

The regulations sit within a broader set of climate commitments. The state is targeting a 50% reduction in greenhouse gas emissions by 2030 and net-zero emissions by 2050, both measured against 1990 levels. To get there, Massachusetts has set a goal of adding 10 GW of new renewable energy capacity and 5 GW of energy storage by 2035.

Healey’s administration framed the regulations as a response to rising electricity costs, environmental pollution, and public health concerns tied to the data center building wave.

The Data Center Coalition has pushed back on the regulations, arguing that data centers do not necessarily increase electricity rates for other customers and pointing to ongoing economic contributions these facilities make to the state.

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