U.S. utility-scale solar is forecast set another record year in 2024, and new tax credit rules in the Inflation Reduction Act (IRA) of 2022 are beginning to ramp up financing of these projects. An example is the recent $140 million tax equity deal between Barclays and Lightsource bp, which will finance the construction of the Prairie Ronde 180 MW solar project in St. Landry Parish, Louisiana.
Lightsource bp plans to construct, own, and operate the solar farm, while McDonald’s will purchase all of the electricity generated by the project through a power purchase agreement. The output is equivalent to the annual energy demand of about 630 of its restaurants.
Construction is underway at the St. Landry Parish site, where 800,000 domestically produced First Solar modules are mounted on Array trackers. Commercial operation is expected late this year, and the company reports the project will create 250 new jobs during construction.
Lightsource expects more than $20 million in economic benefits for St. Landry Parish public services such as local school systems and emergency services over the life of the project, including $8.3 million in the first five years after construction begins. The project is also estimated to abate 231,800 metric tons of greenhouse gas emissions annually, or the equivalent of removing 50,000 fuel-burning cars from the road annually.
“Lightsource bp’s investment in St. Landry Parish represents a new day for our community and our schools,” said Jessie Bellard, president of St. Landry Parish. “Their funding boosts job-creating development projects, stronger infrastructure, and better education for our children. With this support, St. Landry Parish is poised to become a regional leader in innovation and opportunity for all.”
As with other Lightsource bp projects, the developer adhered to the local ordinance, which includes strategic placement of buffer zones and vegetative screening to limit visual impact, a biodiversity plan, decommissioning details, and more. The project’s long-term land maintenance and biodiversity plan is expected to support habitat conservation by planting pollinator-friendly crops at the site, restoring one area of the site to native Coastal Prairie, as well as putting Eastern Bluebird boxes around the perimeter.
Barclays acted as the sole external equity investor on the $140 million tax equity deal, which is one of the first to be led by Barclays’ new Sustainable Project Finance team. Working in partnership with the bank’s Energy Transition Group, the tax equity deal will contribute toward the bank’s target of facilitating $1 trillion of Sustainable and Transition Financing between 2023 and the end of 2030.
“Barclays is fully committed to a just transition and working with key clients such as Lightsource bp to evaluate all economic and societal opportunities as we scale climate finance,” said James Edmonds, global head of sustainable project finance at Barclays. “Mobilizing strategic capital is critical for the energy transition and ensures Barclays can make a demonstrable difference in accelerating the scale up of clean energy development projects.”
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