Hello, fellow solar enthusiasts! Today, I want to dive into a topic of great interest: recent noteworthy investments in the utility-scale solar space. Given the immense growth and potential of this sector, it’s become a magnet for significant financing deals. The vitality of this often under-discussed part of the solar industry may surprise some, but for those of us witnessing the growth of solar companies and digging into the financial machinations behind the scenes, it’s an exciting time indeed.
Utility-scale solar saw a record year of installations in 2023. Just one year later and the forecast for 2024 is remarkable, with expectations of nearly doubling the previous record. Amazingly, solar leads the charge with an impressive 58% of expected capacity additions, indicating that solar panels for your home are just the tip of the massive solar iceberg. Paired with batteries (which take second place at a healthy 23% share), we’re looking at a record 36.4 GW of solar and 14.3 GW of battery energy storage.
This substantial capacity expansion needs financing, and boy are we seeing some heavy numbers! Transactions this month shed light on how the new tax credit rules under the Inflation Reduction Act (IRA) of 2022 are fueling the momentum of utility-scale deployment. Strata Clean Energy, for instance, recently secured a whopping $559 million for a 1 GWh battery energy storage project in Arizona. That project alone can potentially power 50,000 homes during peak summer demand!
Historically, tax equity deals have been the go-to for financing larger projects. However, an exciting development made possible by the IRA is arising: the tax credit transfer market. Under this rule, furrows of untapped funding have been unearthed as entities can sell their tax credits to a third party. In fact, the American Clean Power estimates an attractive $10 billion will flow into this market in 2024 due to this newly carved out funding avenue.
Two recent large-scale projects serve as examples of this new funding mechanism. Lightsource bp secured $348 million for two utility-scale projects in Texas, enough to power about 50,000 homes! And Arevon Energy closed in on $350 million for a 200 MW / 800 MWh battery project in California.
The financial landscape is shifting, and as solar array for the home becomes more common, an equally exciting growth is taking place behind the scenes within the solar companies themselves. These companies are navigating through complex financial arrangements and steering us into a sustainable clean energy future, and for that, we owe them a lot of gratitude.
The incredible growth of utility-scale solar investment underscores the vast potential and importance of solar energy. Whether you’re researching solar panels for your home or diving deep into intricate financial transactions backing the industry, one thing is for sure: solar is burgeoning, and its future is as bright as the sun itself!
Stay tuned for more discussions about the solar sector and my continuous coverage on the advancements of solar companies worldwide. Your trusted solar blogger, signing off for now!
Original Articlehttps://pv-magazine-usa.com/2024/02/21/tax-credit-transferability-attracting-billions-to-grid-scale-solar-and-batteries/
