Denmark-headquartered independent power producer (IPP) Ørsted and investment bank JP Morgan have closed a tax equity financing of US$680 million for solar and storage projects in the US.
The portfolio consists of two projects: the Eleven Mile Solar Center, which comprises a 300MW solar facility and a 300MW/1,200MWh storage project with a 4-hour duration in Pinal County, Arizona; and the Sparta solar project, a 250MW solar farm in Mineral, Texas. Ørsted expects both projects to reach commercial operation in 2024, and by the end of the year the company aims to have 2GW of solar capacity in operation in the US.
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The company will also build the Sparta project alongside its Helena Energy Center, a 518MW solar-plus-wind project that is Ørsted’s first co-located wind and solar project.
The Eleven Mile project will benefit from some of the supportive investment opportunities provided by the Inflation Reduction Act (IRA) in the US, with its solar component to generate production tax credits (PTCs) over the next ten years, while its storage component will receive a one-time investment tax credit (ITC).
The companies also announced that the deal includes the option for tax credit transferability, another new IRA mechanism to make ITCs easier to trade between companies.
