US electric vehicle, battery, AI and robotics company Tesla has signed a power purchase agreement (PPA) with independent power producer (IPP) ContourGlobal for the Project Sterling solar-plus-storage facility in Arizona.
The project, at which ContourGlobal is expected to begin commercial operations in 2028, will combine 450MW of solar PV capacity and a 360MW/1,400MWh battery energy storage system (BESS), and will be ContourGlobal’s largest renewable energy asset upon completion. The project is physically connected to the Western Area Power Administration (WAPA) grid and has transmission rights into California’s CAISO market, and under the terms of the deal, Tesla will acquire around 90% of the project’s annual electricity output.
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“Securing our biggest PPA ever—and one of the largest of its kind in US renewable history—with an iconic customer like Tesla, a true symbol of the global energy transition, is a testament of our ability to deliver tailor-made solutions to our customer’s energy needs,” said ContourGlobal CEO Antonio Cammisecra.
The deal is notable not only for its scale but also because of the technology mix, with the signing of a PPA for a solar-plus-storage asset becoming increasingly common in the solar industry.
Last week, LevelTen’s latest reporting into PPA prices included a ‘hybrid index’ for the first time, explicitly tracking the prices for renewable-energy-plus-storage offtake deals. While this figure only included European examples on this occasion, PV Tech Premium will speak to the company next week about the potential to expanding the index to include North American offtake agreements.
The news also follows the start of commercial operations at ContourGlobal’s first US solar project, a 185MW facility in Weld County, Colorado.
Tesla-Zelestra PPA follows Zelestra-Meta deals
Tesla has signed a second PPA, with Spanish IPP Zelestra, for another US solar PV project: the 140MW Lumen Farm facility in Texas.
Like the Project Sterling farm, the Lumen Farm project is under development, and Zelestra expects to begin construction next year and enter commercial operation in 2029. Unlike the ContourGlobal project, Tesla will acquire 100% of the output of the Zelestra facility.
This is not the first time Zelestra and Tesla have signed a PPA—the companies agreed to an offtake agreement for a three-project, 57MW portfolio in 2024—and Zelestra US CEO Phil North said the companies were keen to “expand [their] relationship” to the US.
“We are excited to expand our relationship with Tesla to the US,” he said. “We aim to deliver the project and bring the new solar plant online as quickly as possible to support Tesla’s growing energy needs in Texas.”
This is also not the first time that Zelestra has signed a PPA with a hyperscaler for a Texas solar project, having signed an offtake agreement for the 180MW Palmera Solar Project in Freestone County, Texas, last month with tech giant Meta.
This is the eighth offtake agreement signed between Zelestra and Meta, which includes an offtake deal signed this February for the 176MW Skull Creek solar PV project in Anderson County, Texas. Today, Zelestra announced that it had secured US$181 million in green project financing for the Skull Creek project through financier Natixis Corporate and Investment Banking.
These deals are the latest in a long trend of hyperscalers acquiring power from renewable energy projects in the US, often to meet the energy demand of their data centres; neither Meta nor Tesla specified how the power acquired from the Zelestra projects would be used.
