Data Centers in Florence
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Florence, Kentucky – Cost-Effective Midwest Colocation
Florence offers a compelling data center market for businesses prioritizing low operating costs and stable infrastructure in the Midwestern United States. It is an excellent choice for disaster recovery, secondary workloads, and latency-tolerant applications that benefit from Kentucky's aggressive tax incentives and some of the lowest industrial power rates in the nation. This strategic location provides reliable connectivity to serve the Ohio, Kentucky, and Indiana tri-state region.
Florence: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | Solid regional connectivity, though not a primary national hub. |
| Direct Cloud On-Ramps | 0 – as of September 2025 | Cloud access requires connecting to hubs like Cincinnati or Ashburn via private network extensions. |
| Power Cost | $0.06/kWh – as of 2023 | Among the lowest industrial power costs in the United States. |
| Disaster Risk | Moderate (37.13) – as of September 2025 | Very low overall FEMA score; main risks are weather-related events common to the region. |
| Tax Incentives | Yes | Multiple sales and use tax exemption programs are available for qualified data centers. |
| Sales Tax | 6.00% – as of 2025 | Kentucky's state sales tax rate. |
Network & Connectivity Ecosystem
Florence provides a solid foundation for regional connectivity, supported by a mix of local and national carriers.
Carrier Density & Carrier Neutrality: The market is served by approximately 4–8 carriers, as of September 2025. While not as dense as a primary hub, this provides sufficient options for redundant connectivity in carrier-neutral facilities.
Direct Cloud On-Ramps: There are no direct public cloud on-ramps within Florence, as of September 2025. Businesses connect to cloud providers by extending their networks to major hubs like Cincinnati, OH, or more distant interconnection points such as Ashburn, VA, using private line or wavelength services.
Internet Exchange Points (IXPs): Public peering is limited within Florence itself. Most network peering is conducted privately between carriers or by connecting to regional exchanges in nearby metropolitan areas like Cincinnati to optimize traffic flow.
Bare Metal: Bare metal server options are available through providers with a national footprint, such as ColoCrossing and Hivelocity, who can provision dedicated infrastructure within the region.
Power Analysis
Kentucky's power infrastructure is a significant advantage for data center operators, offering both low costs and stability.
Average Cost Of Power: Industrial electricity rates are exceptionally competitive at approximately $0.06/kWh, as of 2023. This low cost structure directly reduces the total cost of ownership for high-density compute deployments. The state's power mix is primarily generated from coal (~70%) and natural gas (~25%).
Power Grid Reliability: The regional power grid is well-engineered, with data center locations typically supported by redundant feeds from separate substations. This ensures high levels of uptime for mission-critical operations.
Market Access, Business & Tax Climate
Florence's business and tax environment is purpose-built to attract technology investment, particularly for data centers.
Proximity To Key Business Districts: The data centers in Florence serve the Greater Cincinnati metropolitan area, including northern Kentucky's growing logistics, manufacturing, and e-commerce fulfillment industries. Proximity to these sectors allows for low-latency support for local business operations.
Regional Market Reach: From Florence, organizations can effectively serve a large population base across Kentucky, Ohio, and Indiana. Its central location makes it a viable disaster recovery site for companies in Chicago, Atlanta, and the East Coast.
Tax Advantage For Data Centers: Kentucky offers significant, data center-specific tax incentives. These programs provide sales and use tax exemptions on equipment, software, and electricity, substantially lowering both the initial capital investment and ongoing operational expenses.
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 overall risk is considered very low compared to the national average. Key environmental risks are primarily meteorological and include severe winter weather, tornadoes, hail, strong winds, and lightning. The risks of earthquake and riverine flooding are also present but are less dominant than atmospheric hazards.
