Latham & Watkins Advises Ørsted in US$680 Million Tax Equity Financing for Solar and Storage Portfolio

Ørsted, a US clean energy developer, announced an investment from J.P. Morgan for US$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 10-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.

Latham & Watkins LLP represents Ørsted in the transaction with a team led by partners Eli Katz and Omar Nazif and counsel Stephen Yeh, with assistance from Deborah Ogali, Nick Eberhart, and Andrea Herman.