(Reuters) – Danish firm Orsted has secured a $680 million investment in tax equity financing from JP Morgan for a portfolio of solar and storage assets in Texas and Arizona, the clean energy developer said on Thursday.
Tax equity enables transferability of tax credits under President Biden’s Reducing Inflation Act of 2022, which corporate buyers can acquire to support clean energy storage projects in the U.S.
Additionally, the Biden administration is undertaking a separate effort to identify areas in 11 Western states most suitable for solar energy development, which it hopes to finalize by the end of the year.
European panel manufacturers are also looking to develop projects outside the EU, as they are pressured by competition from China and the US, whose governments provide more support to their producers.
The investment will help finance the completion of the project in Arizona, along with the 250 MW solar project in Texas, the company said.
The 300 MW Orsted facility in Arizona will receive a one-time investment tax credit investment for its battery storage system, which has become a priority technology amid increased renewable energy capacity. Arizona solar farm will generate production tax credits for the next decade.
JP Morgan, prior to this deal, had investments in 1.8 GW of Orsted’s 5.7 GW US onshore portfolio.
The company expects commercial operations of both projects to begin in 2024.
Utility-scale solar projects added a record 15 gigawatts (GW) of capacity in 2023, a 60% increase from the previous year and marking an all-time high, environmental research group Kayrros said in February.
(Reporting by Pritam Biswas and Seher Dareen in Bengaluru; Editing by Vijay Kishore)
