Tesla Buys 90% of 509 MW Arizona Solar and Storage Project
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- Tesla signed a long-term deal to buy 90% of the output from Project Sterling, a 509 MW solar and 360 MW battery facility in Arizona, with operations expected by 2028
- ContourGlobal is developing Project Sterling, the largest renewable asset in its portfolio, and will retain 10% of the power output for its own trading
- Tesla also finalized a second solar PPA the same day, securing the full 140 MW output of a Texas solar farm from Spanish developer Zelestra
- Project Sterling includes a 360 MW/1,440 MWh battery system connected to the Western Area Power Administration grid, enabling access to California markets
- Tesla is purchasing both solar and storage capacity from third parties despite manufacturing Megapacks and solar panels, signaling a strategic reliance on PPAs over project development
Why it matters: Tesla’s dual PPAs lock in over 640 MW of solar and 360 MW of storage by 2028, addressing urgent energy demands from Gigafactory Texas and AI compute growth. By buying rather than building, Tesla bypasses development delays but forgoes control and potential energy business revenue, a tradeoff increasingly common among hyperscalers facing tightening power markets.
