Thursday, July 18, 2024

JPMorgan Offers $680 Million in Tax Fairness Financing for Ørsted Solar and Storage Tasks


Energy developer Ørsted introduced that it has obtained a $680 million funding in tax fairness financing from JP Morgan, geared toward financing the development of recent photo voltaic and storage tasks in Texas and Arizona.

According to Ørsted, the funding marks one of many largest photo voltaic and storage tax fairness transactions utilizing a mixed manufacturing tax credit score (PTC) and funding tax credit score (ITC) construction because the passage of the Inflation Reduction Act (IRA ). Signed into legislation by President Biden in 2022, the IRA allocates almost $370 billion by way of a sequence of tax credit, loans, grants and subsidies in areas together with renewable vitality and industrial decarbonization options, and for the primary time made these tax credit transferable, creating a brand new mechanism for financing vitality transition tasks.

In the corporate’s assertion saying the funding, Ørsted stated:

“This new tax credit score switch choice, created by the IRA, opens a brand new marketplace for any company purchaser to assist clear vitality tasks and optimize their federal tax invoice by buying tax credit.”

The financing will probably be used to assist fund the completion of the 300 MW photo voltaic and 300 MW storage Eleven Mile Solar Center venture in Pinal County, Arizona, and the 250 MW Sparta Solar venture in Mineral, Texas. Under the phrases of the deal, Eleven Mile Solar Center will obtain a one-time funding tax credit score for its battery storage system, and the photo voltaic farm will generate manufacturing tax credit over a ten-year interval.

Commercial operations for every of the tasks are anticipated to start this 12 months. Ørsted introduced an settlement in December with Meta to produce nearly all of the photo voltaic vitality produced by the Eleven Mile Solar Center for Meta’s Mesa knowledge heart.

Ørsted famous that the settlement builds on JP Morgan’s present investments of 1.8 GW within the firm’s US onshore portfolio.

James Giamarino, Chief Commercial Officer for the Americas at Ørsted, stated:

“Ørsted is an skilled developer and operator of renewable vitality tasks within the US, together with offshore and onshore wind, photo voltaic, and battery storage, all of which generate tax credit worthwhile to buyers With this new market opened by IRA, we’re excited to proceed our tax fairness partnership with JP Morgan and convey new entities seeking to advance the renewable vitality business within the US, supporting in job progress, and selling native financial improvement.

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