Power capacity is one of the most frequently used — and least clearly understood — terms in commercial real estate.
It often gets reduced to a simple question: Does the site have power or not?
But in reality, power capacity is not binary. It’s layered, conditional, and increasingly central to feasibility.
Understanding what power capacity actually means — and what it doesn’t — is becoming essential for evaluating risk, timelines, and long-term project viability.
A property can be “served” by the grid and still lack usable capacity for a specific project.
Power capacity refers to how much electrical load can be reliably delivered to a site, within a defined timeframe, without requiring major infrastructure upgrades.
That distinction matters.
A site with existing service may support:
light industrial use
low-density commercial
legacy operations
…but be unable to support:
high-load industrial users
data-driven operations
expanded development phases
Access alone doesn’t equal adequacy.
Power capacity used to be something developers addressed later in the process. Today, it’s being evaluated earlier — because it’s harder to fix late.
Several factors are driving this shift:
rising baseline electricity demand
long utility upgrade timelines
constrained substations and feeders
competing projects drawing from the same infrastructure
As demand increases, available capacity shrinks — sometimes without visible warning.
“Capacity isn’t just what exists. It’s what’s still available.”
When utilities talk about power capacity, they are usually evaluating multiple layers at once:
Existing load already committed in the area
Remaining headroom on local infrastructure
Upgrade feasibility if capacity is insufficient
Timing — when additional power could realistically be delivered
A site may pencil financially but fail operationally if capacity upgrades push delivery years beyond the project schedule.
Two sites may ultimately support the same electrical load — but not on the same timeline.
That difference can determine:
whether a tenant commits
whether financing closes
whether phasing is required
whether a project proceeds at all
In a constrained environment, time becomes part of capacity.
Instead of asking, “How much power does the site have?”
More experienced teams are asking:
How much power is available today?
How much is already allocated nearby?
What upgrades would be required?
When would additional capacity realistically be delivered?
These questions shift power from a utility checkbox to a core underwriting assumption.
Misunderstanding power capacity can create risks that don’t show up in early spreadsheets:
extended carry costs
forced redesigns
reduced project scope
lost tenant momentum
Conversely, sites with verified capacity gain a quiet advantage. They reduce uncertainty — and in today’s environment, certainty is valuable.
“Power capacity has become a form of entitlement.”
Power capacity isn’t just about whether electricity exists — it’s about how much, how soon, and how reliably it can be delivered.
As commercial real estate becomes more infrastructure-dependent, understanding capacity is no longer optional. It’s part of responsible feasibility analysis and a critical input into smarter site selection.
The most successful projects aren’t just well-zoned or well-located — they’re well-powered.
Keep reading other bits of knowledge from our team.
Have a question about this article or want to learn more?
