Recurrent Energy, the U.S. branch of Canadian Solar, a solar developer, announced on Tuesday that it has secured financing for its solar farm currently under construction in Liberty County, located 50 miles northeast of Houston.
Recurrent will receive $120 million in construction debt, a letter of credit facility, and a term loan for the project from Rabobank, Nord LB, and U.S. Bank. Additionally, the company has obtained $80 million in tax equity financing through U.S. Bancorp Impact Finance, An affiliate of the U.S. banking system. Investing in solar projects with tax equity financing can yield tax benefits and incentives for businesses and individuals.
Dubbed Liberty Solar, the project is expected to have a capacity of 134 megawatts and is scheduled to be operational in 2024. Recurrent Energy recently raised $112 million for another solar project in Oklahoma, reinforcing its strategy to retain greater ownership of projects in select markets.
The Liberty Solar project is located within the Midcontinent Independent System Operator (MISO), which serves 15 U.S. states and the Canadian province of Manitoba. While most of Texas is served by the Electricity Reliability Council of Texas (ERCOT), MISO covers a small area north of Houston, including most of Liberty County. Recurrent Energy aims to increase solar power capacity on the MISO grid, which accounted for only 1% of MISO’s generation mix in 2022.
“Liberty Solar is the second project financing that Recurrent Energy has closed in North America this summer, indicating execution on our strategy to retain greater ownership of projects in select markets,” said Recurrent CEO Ismael Guerrero in a statement.
The company has already secured a power purchase agreement for 100% of Liberty Solar’s production capacity, with companies such as Wayfair, Autodesk, EMD Electronics, Biogen, and an unnamed large healthcare company. Texas has experienced significant growth in solar energy projects in recent years.
As of the second quarter of 2023, the state has over 18,800 megawatts of installed solar capacity, a substantial increase from the 1,220 megawatts installed by the end of 2016. Most of these solar projects are connected to the ERCOT grid, which serves approximately 90% of Texas.
