Aerospace company SpaceX has announced that it will build a 10 GW solar manufacturing facility in Bastrop County near Austin, Texas, as part of its aims to launch AI data centers in Earth’s orbit.

According to the company’s filings submitted to Bastrop County, the facility will have two floors. Each floor is targeted to have a production capacity of 5 GW of solar cells.

SpaceX also plans to double the size of its existing Starlink manufacturing facility, where it plans to manufacture solar cells and Starlink products, according to Bloomberg News.

In 2021, the U.S. National Renewable Energy Laboratory selected SpaceX to launch perovskite solar cells into space to evaluate their potential and assess the durability of the materials.

Other organizations have also been working to generate solar energy in space. Researchers at Northumbria University are studying the production of wireless electricity from space to Earth by harvesting solar energy.

Global electricity demand from data centers grew by 17% in 2025. In the U.S., which experienced 2% growth, data centers accounted for roughly 50% of total energy demand, according to the  International Energy Agency (IEA).

This February, IEA had projected U.S. electricity demand to grow at roughly 2% annually through 2030, with data centers accounting for nearly half of this growth.

Rising energy demand from data centers will require grid modernization. The IEA reported that more than 2,500 GW of generation, storage, and large-load projects, including data centers, are currently stalled in grid connection queues worldwide.

Last year, the Electric Reliability Council of Texas (ERCOT) warned that the state’s grid was facing a sharp rise in large-load interconnection requests, mainly from data centers. ERCOT tracked approximately 226 GW of large loads, while solar and storage dominate the generation queue. The report also highlighted rising transmission planning needs, winter reliability preparations, and compliance gaps for inverter-based resources.

In India, industry experts noted that data centers will drive significant demand for renewable energy, particularly in states such as Tamil Nadu, Maharashtra, and Telangana. Internationally funded data centers are planning to procure renewable energy alongside infrastructure upgrades to reduce carbon emissions. Demand is expected to surpass the steel industry, driven by data localization, AI, and internet growth. The experts added that developers must maintain project pipelines to meet the sector’s phased power ramp-up.