Data Centers in Florence
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Florence – Cost-Effective Midwest Colocation
Florence, Kentucky, offers a compelling, low-cost alternative to primary data center markets. For businesses prioritizing operational expense management and disaster recovery, this market provides attractive power pricing and significant tax incentives, all within low-latency reach of major Midwest and East Coast hubs. Its strategic location delivers reliable infrastructure without the premium costs of more congested coastal regions.
Florence: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | Solid regional connectivity, suitable for most enterprise and DR workloads. |
| Direct Cloud On-Ramps | 0 – as of September 2025 | Private connections are available; nearest major cloud hubs are in Ohio or Virginia. |
| Power Cost | $0.06/kWh – as of 2023 | Highly competitive industrial power rates, significantly below the national average. |
| Disaster Risk | Moderate (37.13) – as of September 2025 | Primary risks are atmospheric (wind, storms); major seismic or coastal events are not a factor. |
| Tax Incentives | Yes | Multiple DC-specific sales, use, and property tax exemptions are available for qualifying projects. |
| Sales Tax | 6.00% – as of 2025 | Kentucky state sales tax; data center-specific exemptions can reduce this significantly. |
Network & Connectivity Ecosystem
Florence provides a stable and capable connectivity environment, well-suited for enterprise applications, content delivery, and disaster recovery sites that do not require dense, direct cloud access.
Carrier Density & Carrier Neutrality: With access to over 4 providers, as of September 2025, the Florence market offers sufficient carrier diversity for redundant network architectures. Facilities are typically carrier-neutral, allowing customers to connect with their preferred providers.
Direct Cloud On-Ramps: There are no direct, native cloud on-ramps within Florence-based data centers, as of September 2025. Businesses connect to cloud providers like AWS, Google Cloud, and Microsoft Azure via the nearest major hubs in Ohio and Virginia, using private network interconnects or dedicated wavelength services.
Internet Exchange Points (IXPs): Public peering is not a feature of the local market. Most network peering is conducted privately between carriers or routed through major exchange hubs in cities like Cincinnati or Chicago to optimize traffic flow.
Bare Metal: Bare metal server options are available in the broader region through providers like ColoCrossing. These services offer dedicated compute resources for performance-sensitive applications.
Power Analysis
Kentucky's power landscape is defined by some of the lowest industrial electricity costs in the United States, making it a compelling location for power-intensive operations.
Average Cost Of Power: The average industrial electricity rate is approximately $0.06/kWh, as of 2023. This aggressive pricing structure can lead to substantial operational savings for data centers compared to more expensive coastal markets. The grid is primarily powered by coal (~70%) and natural gas (~25%).
Power Grid Reliability: The regional power grid is well-engineered to support industrial and commercial operations. Data centers in the area are typically served by redundant power feeds from separate substations, ensuring high levels of uptime for critical infrastructure.
Market Access, Business & Tax Climate
Florence's strategic location and favorable business environment make it an attractive secondary market with excellent regional access.
Proximity To Key Business Districts: Located in Northern Kentucky, Florence is part of the Cincinnati metropolitan area. This provides data centers with low-latency access to the numerous corporate headquarters and financial, healthcare, and logistics industries based across the Ohio River.
Regional Market Reach: The market effectively serves a tri-state area encompassing Kentucky, Ohio, and Indiana. Its central U.S. location makes it a viable hub for reaching consumers and business partners throughout the Midwest and into the Southeast.
Tax Advantage For Data Centers: Kentucky offers strong, data center-specific tax incentives. Approved projects can receive exemptions on sales and use taxes for equipment and software, significantly lowering the upfront capital investment required to build or expand a facility.
Natural Disaster Risk
Florence has a moderate natural disaster risk profile, with a FEMA National Risk Index score of 37.13 out of 100, as of September 2025. The primary threats are atmospheric and geological, common to the Midwest region.
Key environmental risks include tornado, riverine flooding, severe wind, and earthquake. The area is not exposed to coastal threats like hurricanes or tsunamis, making it a stable location for disaster recovery infrastructure for businesses based in coastal regions.
