Arevon Energy has closed financing on its Vikings solar-plus-storage project in California using tax credit transferability provisions in the Inflation Reduction Act.
The financing combined a commitment with J.P. Morgan to purchase $191 million of investment tax credits and production tax credits with an additional $338 million debt facility financed with MUFG, BNP Paribas, Sumitomo Mitsui Banking Corporation, First Citizens Bank, and National Bank of Canada.
The Inflation Reduction Act’s transferability tax credit provision allows for the simple transfer of tax credits from project owners to profitable taxpayers. In June of 2023, the Department of the Treasury released guidance on the tax credit transferability mechanisms established by the Inflation Reduction Act.
The Vikings project is “one of the nation’s first solar peaker plants and it is one of the first utility-scale solar-plus-storage ITC and PTC transferability transactions to close since the Inflation Reduction Act passed in August 2022,” Kevin Smith, Arevon’s chief executive officer, said in a statement.
Arevon’s Vikings project is a 157-megawatt solar installation coupled with 150-MW, 600-megawatt hour battery energy storage facility under construction in Imperial County.
Construction, which is being performed by SOLV Energy, is scheduled for completion and expected to enter service in the third quarter of 2024.
The project uses photovoltaic modules supplied by Arizona-based First Solar, solar trackers from Nextracker of Fremont, California, and utility scale batteries from Tesla.
Vikings is contracted to provide resource adequacy and renewable energy to San Diego Community Power, helping to support grid reliability beginning in 2024, Arevon said.
Arevon acquired the Vikings Energy Farm project from RAI Energy International and Apex Energy Solutions in October 2021. At the time, the company said the project was among the first solar peaker plants in the United States. Its one-to-one configuration that matches solar and storage capacity will allow the project to shift daytime solar production to late afternoon and evening hours, providing on-peak energy whenever necessary.