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Data Centers in Puerto Rico

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Puerto Rico – Strategic Caribbean Connectivity Hub

Executive Summary

Puerto Rico is a key digital gateway for businesses targeting the Caribbean and Latin America. The island offers a unique combination of U.S. legal frameworks, significant tax incentives, and robust subsea cable connectivity, making it a strategic location for disaster recovery and content delivery infrastructure serving the wider region.

Puerto Rico: At A Glance

FactorRating / DataNotes
Global Connectivity GradeBStrong subsea cable landings provide reliable links to North and South America.
Direct Cloud On-Ramps0 – as of September 2025Nearest cloud access hub is Miami; private network extensions are available.
Power Cost$0.19/kWh – as of 2022Higher than the U.S. average, reflecting a petroleum-heavy energy mix.
Disaster RiskModerate – as of September 2025Primary risks include hurricanes and seismic activity; facilities are built to withstand them.
Tax IncentivesYesClean Energy Production Tax Credits are available for data center electricity consumption.
Sales Tax11.5% SUT – as of September 2025Sales and Use Tax is applicable to equipment and services.

Network & Connectivity Ecosystem

Puerto Rico's connectivity is defined by its strategic position as a major subsea cable landing point in the Caribbean. This provides low-latency routes to North America, South America, and neighboring islands.

Carrier Density & Carrier Neutrality The market includes over 2 providers as of September 2025, with multiple carrier-neutral facilities available. These data centers offer access to a variety of local and international carriers, ensuring competitive network pricing and redundancy.

Direct Cloud On-Ramps There are no direct cloud on-ramps from public cloud providers located within Puerto Rico as of September 2025. Businesses requiring dedicated cloud access typically establish private network connections (PNI or wave) to providers in Miami, a major interconnection hub.

Internet Exchange Points (IXPs) The primary Internet Exchange Point is the Puerto Rico Bridge Initiative (PRBI). Most large-scale peering, however, occurs privately within the primary colocation facilities, leveraging the dense concentration of subsea cable operators and service providers.

Bare Metal Bare metal server options are available, providing dedicated, high-performance computing resources. Providers such as Hivelocity offer deployment options suitable for workloads requiring direct hardware control and consistent performance.

Power Analysis

The island's power infrastructure presents both challenges and opportunities for data center operators.

Average Cost Of Power The industrial electricity rate is approximately $0.19/kWh as of 2022. This price is higher than on the U.S. mainland, driven by a grid that relies heavily on petroleum (62%) and natural gas (24%). This cost structure makes power efficiency a critical factor in total cost of ownership.

Power Grid Reliability The public power grid has faced reliability challenges. In response, all major data centers in Puerto Rico have invested heavily in on-site power generation, including redundant diesel generators and UPS systems, to guarantee uptime and meet stringent service level agreements.

Market Access, Business & Tax Climate

Puerto Rico offers a compelling business environment under the U.S. legal system, with unique financial benefits.

Proximity To Key Business Districts Data centers are located near San Juan, the island's primary economic and financial center. This provides easy access for local businesses in finance, healthcare, and manufacturing that require low-latency colocation services.

Regional Market Reach The island is an excellent hub for serving digital consumers and enterprises throughout the Caribbean basin. Its connectivity makes it a strong choice for content delivery networks (CDNs), gaming platforms, and financial services targeting the region.

Tax Advantage For Data Centers Puerto Rico offers significant tax incentives that can substantially reduce operating expenses. The availability of clean energy tax credits helps offset higher electricity costs and supports sustainability goals for data center operators.

Natural Disaster Risk

As a Caribbean island, Puerto Rico has a moderate risk profile for natural disasters, which modern data centers are engineered to mitigate.

Based on regional data as of September 2025, the key environmental risks for infrastructure include:

  • Hurricane: High risk of tropical cyclones during the Atlantic hurricane season.
  • Earthquake: Moderate seismic risk due to proximity to the Puerto Rico Trench.
  • Flooding: Risk of inland and coastal flooding resulting from severe storms.
  • Landslide: Localized risk in hilly or mountainous terrain, typically away from primary data center zones.
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