Tuesday, May 28, 2024

JPMorgan, Ørsted Close $680MM Tax-Equity Financing Solar/Storage Deal

From Ørsted, May 23:

Ørsted Closes $680 Million in Tax Equity Financing for Solar and Storage Portfolio 

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....


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