New Jersey law will let data centers pay for home energy upgrades

New Jersey has a new law that could pay for home energy upgrades using data center money. Gov. Mikie Sherrill signed the Data Center Fair Share Act, which lets data centers fund household improvements like heat pump heating and water heating systems, rooftop solar, and batteries. In exchange for covering these costs, data centers get faster approval to connect to the power grid. The idea is that reducing home energy use elsewhere frees up capacity for the data centers, since they've been driving up electricity prices in the regional grid that covers New Jersey and much of the Midwest and mid-Atlantic.

For homeowners, this could mean lower electricity bills, potentially by hundreds or thousands of dollars a year, if you're enrolled in one of these programs. Rewiring America, a nonprofit that pushed for this approach, estimates that of New Jersey's roughly 2 million single-family homes, about 85,000 have older electric-resistance heating and 422,000 have electric-resistance water heaters — prime candidates for a heat pump swap. But the group says any household could potentially benefit from solar or battery storage too.

Nothing happens immediately. New Jersey's utility regulator has a year to set the rules, and utilities then have 180 days to submit their own program proposals. A policy analyst involved in drafting the bill estimates enrolled households could start receiving funded upgrades as soon as mid-2028. Other states, including New York, California, and Pennsylvania, are exploring similar ideas, so it's worth watching whether something similar comes to your state.