“Location, location, location” has long been the watchword for businesses looking to establish or relocate their facilities. For industrial users, this has typically meant proximity to highways, rail, and ports, as well as access to both skilled and unskilled labor. In recent years, however, another factor has emerged as a top priority — access to reliable power.
While power requirements have always been a major consideration in site selection for industrial users, it is now even more critical with the surge in data center development and the electrification of everything. In 2023, data centers accounted for approximately 4.4% of U.S. annual electricity consumption — a figure that has surged in recent years. Data centers aren’t solely responsible for the rise in energy consumption. At its Fall Conference in 2024, the Society of Industrial and Office Realtors (SIOR, of which nearly 20% of Voit brokers are members) held a session titled “The Electrification of Everything and What it Means for Commercial Real Estate.” During the session, one speaker noted that “there is a massive amount of power being required by [industrial] operators going forward.” It’s no longer just heavy manufacturing users; it’s also warehouse/distribution centers. “With electric forklifts, racking, retrieval, and conveyor systems as well as robotics, a ton of automation is being put into these buildings, and all of that requires considerably more power,” he said.
Prologis’ recent report, Bold Predictions for 2026: Supply Chain Trends to Watch, echoed this sentiment: “The need for power-ready logistics facilities capable of supporting automation and manufacturing will be a top three factor globally in location selection in 2026…Power requirements for logistics users continue to increase, not just in advanced manufacturing segments and data centers, but for traditional logistics uses as well, as automation, HVAC and new technologies add to energy requirements. Looking ahead, we expect energy consumption to rise further: Fully automated facilities use 3−5x more power than the 2024 vintage baseline.”
Users and Developers are Shifting Site Selection Focus to the Power Grid
The availability of reliable power is no longer just an ancillary operating expense. Infrastructure has surpassed labor availability as the primary ‘must-have,’ taking the top spot on the site-selection list for industrial developers and users. Potential locations are now being eliminated in the earliest stages of due diligence based on grid capacity, reliability, and long-term rate volatility. As California’s decarbonization mandates take hold, the ability to secure low-carbon power at scale has transformed site selection into a sophisticated exercise in energy grid analysis.
In Prologis’ 2026 Supply Chain Outlook Report, which surveyed over 1,800 business leaders across the globe, 83% of business leaders believe energy reliability will be the next major supply chain crisis, as “89% experienced energy disruptions in the past year, with 70% worrying more about power outages than any other supply chain disruption.” As a result, occupiers and developers are collaborating with energy consultants and infrastructure engineers early in the site selection process to better understand power availability, resilience, and pricing projections over time.
Developing a Power Checklist
For developers and occupiers exploring expansion or relocation options, understanding the energy landscape has become essential. Below are some of the questions to ask before committing to a site or facility, with assistance from one of Voit’s trusted commercial real estate advisors and an energy consultant. Please note that while many of the items below are generalized, they include specific references to California policies and regulations.
Capacity & Interconnection Readiness
What is the Circuit Capacity?
Ask the utility to provide a Distribution Resource Plan (DRP) lookup. This online portal displays grid capacity for new energy projects (e.g., solar, batteries) via maps and data. Keep in mind that just because a line runs past the property, it doesn’t mean the local circuit or substation has the headroom — the additional capacity of the electric system available to accommodate growth without the need to install new and larger equipment — to support your peak load. This displays grid capacity for new energy projects via maps and data.
What is the Time to Market?
In Southern California, if a substation upgrade is required, timelines typically exceed 24 to 36 months. For a $3,000 fee, you can order an Engineering Analysis Report (EAR) from Southern California Edison (SCE) to provide key insights and specific information for decision-making. The report includes the site’s power availability and the time required to build new infrastructure, if needed.
Resilience & Reliability
Is the site on an EPSS Circuit?
Enhanced Powerline Safety Settings (EPSS) are high-sensitivity settings that enable utilities to automatically de-energize power lines within a fraction of a second when a hazard contacts the line. By cutting power before a spark can ignite dry vegetation, EPSS has reduced wildfires by 60%, but power cannot be restored with a simple remote switch. Utility crews must manually patrol every mile of the affected circuit to ensure no hazards remain before re-energizing. This turns nuisance flickers into multi-hour or multi-day shutdowns and is not suitable for businesses such as cold storage or continuous manufacturing.
Is a Dual-Feed service available?
Dual feed is an electrical infrastructure setup in which a facility is supplied with two independent power sources, typically from different substations or distribution feeders. It significantly reduces the probability of a total power interruption because it is highly unlikely that both independent feeds will fail simultaneously.
What is the Fault Current for this site?
This technical value determines the type of electrical gear you must install at the facility. Miscalculating this can lead to massive equipment cost overruns. To determine the fault current at your site, contact your local electric utility (PG&E, SCE, SDG&E) or a qualified electrical engineer.
2026 Regulatory & Cost Strategy
Does the site support Title 24 (2025 Standards) mandates?
As of January 2026, many new builds must include solar + storage. Ask: “Is the roof structurally ready for PV, and is there a designated ‘pad’ for battery energy storage systems (BESS)?”
Are you eligible for the California Industry Assistance Credit?
This state credit can significantly offset the high non-bypassable charges on your utility bill for energy-intensive users.
What is the projected Load Profile?
Utilities now require a Load Justification Form. Be prepared to provide your 24-hour duck curve usage (the gap between peak solar production during the day and high grid demand at night), showing when you will draw from the grid and when you can self-generate.
Actionable Resources
- SCE Power Site Search Tool (PSST) A specialized portal for industrial developers to see capacity by address.
- LADWP Electric Service Requirements Manual Essential for understanding the electrical requirements in the City of LA.
- California’s ISO “Today’s Outlook” A real-time view of when the grid is most stressed, helping users plan Demand Response participation.
For expert advice on developing, selling, acquiring, or leasing industrial properties, contact one of Voit Real Estate Services’ trusted commercial real estate advisors.