AUSTIN,
Texas, May 23, 2024 /PRNewswire/ -- Today,
Ørsted, a leading U.S. clean energy developer, announced an
investment from J.P. Morgan for $680
million in tax equity financing for a portfolio of solar and
storage assets in Texas and
Arizona. The project portfolio
consists of Eleven Mile Solar Center, a 300 MW solar and 300 MW
/1200 MWh storage project in Pinal
County, Arizona and Sparta Solar, a 250 MW solar project in
Mineral, Texas.
This deal represents one of the largest solar and storage tax
equity transactions that uses a combined production tax credit
(PTC) and investment tax credit (ITC) structure since the passage
of the Inflation Reduction Act (IRA) in August 2022. The Eleven Mile Solar Center will
receive a one-time investment tax credit for its battery storage
system while the solar farm will generate production tax credits
over a ten-year period.
The tax equity partnership with J.P. Morgan includes the
option for tax credit transferability. This new tax credit transfer
option, created by the IRA, opened a new market for any corporate
buyer to support clean energy projects and optimize their federal
tax bill through the purchase of tax credits.
"Ørsted is an experienced developer and operator of renewable
energy projects in the U.S., including offshore and onshore wind,
solar, and battery storage, all of which will generate tax credits
valuable to investors," said James
Giamarino, Chief Commercial Officer for the Americas at
Ørsted. "With this new market unlocked by the IRA, we're
excited to continue our tax equity partnership with J.P. Morgan and
bring on new entities looking to advance the U.S. renewable energy
industry, support job growth, and promote local economic
development."
The tax equity investment will help fund the completion of both
projects, which totals 550 MW of solar capacity and 300 MW of
battery energy storage with the capacity to discharge for 4 hours
(1200MWh). Commercial operations for both projects are expected to
commence in 2024. The agreement also builds on J.P. Morgan's
existing investments in 1.8 GW of Ørsted's total 5.7 GW onshore
portfolio in the United States.
By the end of 2024, Ørsted will have a portfolio of solar
projects generating 2 GW of power across the United States. Sparta Solar is part of the
Helena Energy Center, a combined 518 MW wind and solar project in
Bee County and Ørsted's first
co-located wind and solar project. Additionally, Eleven Mile Solar
Center is Ørsted's first project in Arizona. The solar projects will contribute a
combined $125 million in tax revenue
over the life of the projects for public services in the local
communities.
Latham & Watkins LLP served as legal counsel for Ørsted and
Milbank LLP served as legal counsel for J.P. Morgan.
About Ørsted
A global clean energy leader, Ørsted develops, constructs, and
operates offshore and land-based wind farms, solar farms, energy
storage facilities, and bioenergy plants. Ørsted was the first
energy company in the world to have its science-based net-zero
emissions target validated by the Science Based Targets initiative
(SBTi).
In the United States, the
company has more than 700 employees and a growing portfolio of
clean energy assets and partnerships that includes offshore wind
energy, land-based wind energy, solar, storage technologies and
e-fuels. A leader across the renewable energy sector in
the United States, Ørsted holds
the top position in offshore wind energy and operates America's
first offshore wind farm, located off the coast of Block Island.
Ørsted has a total U.S. land-based capacity of over 5 gigawatts
across wind, solar, storage technologies and e-fuels. To learn more
about the Ørsted U.S. business, visit us.orsted.com or follow the
company on Facebook, Instagram, and Twitter (@ØrstedUS).
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SOURCE Ørsted