JP Morgan commits $680 million in tax equity financing to solar and storage – pv magazine USA

Renewable energy company Ørsted announced that it has secured $680 million in tax equity financing for a portfolio of solar and storage assets in Texas and Arizona.

The project portfolio includes Eleven Mile Solar Center, a 300 MW solar and 300 MW/1,200 MWh solar project in Pinal County, Arizona, and Sparta Solar, a 250 MW solar project in Mineral, Texas.

JP Morgan has made available a tax equity investment consisting of the Production Tax Credit (PTC) and the Investment Tax Credit (ITC) under the Inflation Reduction Act (IRA). More than 1.8 GW of Ørsted’s 5.7 GW portfolio is currently backed by the investment bank.

The Eleven Mile solar center will receive a one-time investment tax credit for its battery energy storage system, while the solar farm will generate production tax credits over a ten-year period.

A company with tax capital includes options for possibility of transferring tax relief, a new option created by the IRA. Tax credit transfers have opened a new market for any corporate buyer to support clean energy projects and optimize their federal tax bill by purchasing tax credits.

“With this new market unlocked by the IRA, we are excited to continue our tax equity partnership with J.P. Morgan and attract new entities that want to grow America’s renewable energy industry, support job growth and promote local economic development,” said James Giamarino, commercial director for the Americas, Ørsted.

Latham & Watkins LLP served as legal advisor to Ørsted and Milbank LLP served as legal advisor to J.P. Morgan.

The tax equity investment is expected to help complete two projects with a combined capacity of 550 MW in solar PV and 300 MW in 4-hour energy storage. Commercial operations of both projects are expected to occur in 2024. The solar projects are expected to provide a total of $125 million in tax revenues over the life of the projects for public services in local communities.