Wells Fargo provides tax equity financing for solar+storage project

Wells Fargo Renewable Energy & Environmental Finance closed tax equity financing for the Arroyo Solar and Storage project with D. E. Shaw Renewable Investments. Once operational, Arroyo – a 300 MWAC solar and 150 MWAC/600 MWh battery energy storage system facility developed in northwestern New Mexico – will be one of the largest solar and battery projects in the U.S.

Arroyo is Wells Fargo’s first tax equity investment in a project with co-located battery storage, and D.E. Shaw’s first solar project with co-located battery storage to enter construction and financing. Shaw acquired the project from the original developer, Centaurus Renewable Energy.

Financing for the project acquisition and construction was led by Nord/LB and included four other joint lead arrangers: MUFG Union Bank, N.A., Sumitomo Mitsui Banking Corp., National Bank of Canada, and Societe Generale.

Sundt Construction Inc. is constructing the solar facility, which will use Nextracker smart solar trackers. ECI of Billings, Montana, is providing the design for the substation and switchyard that will be built by its subsidiary, EPC Services Co. Tesla will supply and commission Megapacks for the facility, and New Mexico-based Affordable Solar Installation will construct the battery energy storage system. In addition, SOLV Energy and Tesla will provide ongoing operations and maintenance services to the facility once operational.

Arroyo has two offtake contracts with Public Service Company of New Mexico for the solar and storage output respectively. The solar and energy storage will supply a portion of the replacement capacity needed to retire the coal-fired 847 MWac San Juan Generating Facility in New Mexico.

Wells Fargo said it has made $12 billion in cumulative tax-equity investments in more than 500 solar, wind, and fuel cell transactions. It said that as of November 2020, its investments have provided 13% of all solar and wind capacity in the U.S. over a 10-year period.