Data Centers in Iowa

Iowa – Low-Cost Energy and Reliable Midwestern Scale

Executive Summary

Iowa is a strategic landing zone for enterprises requiring massive scalability and aggressive cost management. By leveraging the state's significant wind energy production and business-friendly tax environment, organizations secure high-uptime environments while maintaining low operational overhead. This market is a primary choice for disaster recovery and large-scale compute workloads that benefit from geographical stability.

Iowa: At A Glance

Network & Connectivity Ecosystem

Carrier Density & Carrier Neutrality: The market features a carrier count of over 50 providers as of September 2025. Facilities across Des Moines, Cedar Rapids, and Council Bluffs offer neutral environments that prevent vendor lock-in and encourage competitive pricing for long-haul and local loop circuits.

Direct Cloud On-Ramps: There are 0 direct on-ramps within the state as of September 2025. Connectivity to major platforms like AWS and Microsoft Azure is achieved via low-latency private extensions to Chicago, which serves as the primary regional interconnection hub.

Internet Exchange Points (IXPs): The Des Moines Internet Exchange facilitates local peering to reduce latency for regional traffic. Most high-volume peering is managed through private interconnects or via the nearest national hubs to ensure maximum throughput.

Bare Metal: High-performance bare metal services are available to support hybrid architectures. Providers such as Hivelocity and phoenixNAP offer dedicated compute resources for businesses needing localized hardware control without the capital expense of ownership.

Power Analysis

Average Cost Of Power: Industrial electricity rates typically range from $0.07 – $0.09/kWh as of September 2025. This cost structure provides a significant advantage for power-hungry compute clusters compared to saturated coastal markets, directly improving bottom-line margins.

Power Grid Reliability: The grid is well-engineered and benefits from a diverse energy mix, including approximately 60% wind generation as of September 2025. Redundant substation support in major data center corridors ensures consistent delivery and high resiliency even during peak demand cycles.

Market Access, Business & Tax Climate

Proximity To Key Business Districts: Data centers are strategically positioned near the insurance and financial services hubs in Des Moines and the technology corridors of the Quad Cities. This proximity allows for rapid deployments and local technical support for critical financial and agricultural infrastructure.

Regional Market Reach: Iowa provides an ideal central location for serving the entire Midwest, reaching major population centers in Illinois, Nebraska, and Minnesota with minimal hop counts and consistent performance.

Tax Advantage For Data Centers: Qualifying projects benefit from substantial exemptions on sales and use taxes for server equipment and electricity. This financial structure significantly reduces the total cost of ownership for multi-megawatt deployments over the lifecycle of the facility.

Natural Disaster Risk

Iowa maintains a Moderate (43.14) risk profile as of September 2025. The environment is geologically stable, with the primary threats stemming from severe seasonal weather events rather than catastrophic geological shifts.

The highest-scoring natural hazards for the region include:

• Strong Wind
• Tornado
• Hail
• Riverine Flooding
• Ice Storms
• Drought
• Winter Weather

Hazards such as Coastal Flooding and Tsunami are not material risks for this inland market. Infrastructure in the region is specifically hardened to withstand extreme temperature fluctuations and high-wind events.