JPMorgan Provides $680 Million in Equity Financing for Ørsted Solar and Storage Projects

Energy developer Ørsted announced that it has received a $680 million tax equity investment from JP Morgan to finance the construction of new solar and storage projects in Texas and Arizona.

According to Ørsted, this investment is one of the largest solar and storage tax equity transactions using a combined production tax credit (PTC) and investment tax credit (ITC) since the passage of the Inflation Reduction Act (IRA). Signed into law by President Biden in 2022, the IRA committed nearly $370 billion in a range of tax credits, loans, grants and subsidies to areas including renewable energy and industrial decarbonization solutions and, for the first time, made these tax credits transferable, creating a new funding mechanism projects related to energy transformation.

In a company statement announcing the investment, Ørsted stated:

“This new tax credit rollover option created by the IRA has opened up a new market for any corporate buyer to support clean energy projects and optimize their federal tax bill by purchasing tax credits.”

The financing will be used to complete the 300 MW Eleven Mile Solar Center project and 300 MW solar energy storage project in Pinal County, Arizona, and the 250 MW Sparta Solar project in Mineral, Texas. Under the terms of the agreement, Eleven Mile Solar Center will receive a one-time investment tax credit for its battery energy storage system, and the solar farm will generate production tax credits over a ten-year period.

Commercial operations of each project are expected to begin this year. In December, Ørsted announced an agreement with Meta to supply most of the solar power generated by Eleven Mile Solar Center to Meta’s Mesa data center.

Ørsted noted that the deal builds on JP Morgan’s existing investment in 1.8 GW of the company’s US onshore portfolio.

James Giamarino, commercial director for the Americas at Ørsted, said:

“Örsted 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 provide tax benefits to investors. With the IRA unlocking this new market, we are excited to continue our partnership with J.P. Morgan for tax equality and hire new entities that want to grow America’s renewable energy industry, support job growth and promote local economic development.