Data Centers in Puerto Rico

Puerto Rico – Strategic Caribbean Hub with Tax Advantages

Executive Summary

Puerto Rico offers a unique value proposition for businesses requiring a strategic presence in the Caribbean and a network bridge between North and South America. The market combines the stability of the U.S. legal framework with significant local tax incentives, creating a compelling environment for disaster recovery sites and edge deployments serving regional consumer and business markets.

Puerto Rico: At A Glance

Network & Connectivity Ecosystem

Puerto Rico’s connectivity is defined by its strategic position as a landing point for numerous subsea cables connecting the Americas. This provides a resilient foundation for network infrastructure.

Carrier Density & Carrier Neutrality: The market includes 7 data centers and over 2 network providers, as of September 2025. While the number of providers is concentrated, the facilities offer carrier-neutral access to key domestic and international networks.

Direct Cloud On-Ramps: There are no direct public cloud on-ramps located within Puerto Rico, as of September 2025. Businesses connect to cloud providers by procuring private network extensions or dedicated circuits to major hubs in Miami and South Florida.

Internet Exchange Points (IXPs): Public internet exchange points are limited. Most network peering is conducted privately within colocation facilities or routed through the primary peering hub of Miami.

Bare Metal: Bare metal server options are available, providing dedicated compute resources for performance-sensitive applications. Providers such as Hivelocity offer deployment options in the region.

Power Analysis

Average Cost Of Power: Industrial power costs are approximately $0.19/kWh, as of 2022. This rate is higher than on the U.S. mainland and can impact total operational costs for high-density deployments. The energy mix is primarily petroleum and natural gas.

Power Grid Reliability: The regional power grid has faced reliability challenges. In response, data centers in Puerto Rico are engineered with substantial on-site power generation, fuel storage, and UPS systems, typically offering N+1 or 2N redundancy to ensure continuous uptime.

Market Access, Business & Tax Climate

Proximity To Key Business Districts: Data centers in Puerto Rico are situated to serve the island's key business zones, government agencies, and the broader financial and pharmaceutical industries. They also act as critical network aggregation points for the numerous subsea cable landing stations.

Regional Market Reach: The island is an effective hub for delivering low-latency services to the entire Caribbean basin, Central America, and the northern coast of South America. Its geographic position makes it a strategic asset for content delivery and application performance.

Tax Advantage For Data Centers: Puerto Rico offers compelling tax incentives that can significantly reduce operational expenses. Programs like the Clean Energy Production Tax Credit directly benefit data center operators by lowering the effective cost of power, a major component of a facility's budget.

Natural Disaster Risk

Puerto Rico has a moderate risk profile for natural disasters, with specific geographic and meteorological factors to consider.

Based on regional data as of September 2025, the primary environmental risks include:

• Hurricane: High risk due to its location within the Atlantic hurricane belt.
• Earthquake: Significant seismic activity is present in the region.
• Coastal Flood / Storm Surge: A material risk for any infrastructure located in low-lying coastal areas.
• Landslide: A notable risk, particularly in hilly or mountainous terrain during periods of heavy rainfall.

Data center facilities in this market are purpose-built to mitigate these specific risks, with hardened structures and operational plans designed for resilience.