Ørsted Provides $680 Million in Taxpayer Capital Financing for Solar and Storage Projects in Texas and Arizona

Prominent renewable energy developer Ørsted announced the successful raising of $680 million in tax equity financing for a portfolio of solar and storage assets located in Texas and Arizona.

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

The tax equity investment, backed by JP Morgan, includes production tax credit (PTC) and investment tax credit (ITC) assets made available under the Inflation Reduction Act (IRA). With investment bank support of over 1.8 GW of Ørsted’s 5.7 GW portfolio, the partnership marks a significant milestone in the development of renewable energy initiatives.

Under the agreement, Eleven Mile Solar Center will benefit from a one-time tax credit for investments in a battery energy storage system, while the photovoltaic farm will generate tax credits on production for a period of ten years.

This tax equity partnership leverages the tax credit carryover option introduced by IRAs, opening up new opportunities for corporate buyers to support clean energy projects while optimizing their federal tax liabilities through the purchase of tax credits.

James Giamarino, chief commercial officer for the Americas at Ørsted, expressed enthusiasm for the collaboration, stating: “With IRAs unlocking a new market, we are excited to continue our tax equity partnership with J.P. Morgan and attract new entities willing to support the development of the U.S. renewable energy industry, support growth number of jobs and promote local economic development.

Latham & Watkins LLP provided legal counsel to Ørsted, and JP Morgan served as legal counsel to Milbank LLP.

The tax equity investment is expected to facilitate the completion of two projects totaling 550 MW of solar and 300 MW of 4-hour energy storage. Commercial operations of both projects are expected to begin in 2024, with a combined contribution to tax revenues estimated at $125 million over the life of the projects to support public services in local communities.

This financing represents a significant step forward in Ørsted’s commitment to developing renewable energy infrastructure and underscores the growing momentum toward sustainable energy solutions in the United States.

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