LS Power’s 127-megawatt Arlington Valley Solar Energy II Project in Arizona’s Maricopa County will soon get underway now that the company has completed financing the $550 million project.
It’s the first—but not the last—utility-scale PV project for the company.
The company completed financing for the $550 million project with Prudential Capital Group and General Electric’s Energy Financial Services unit. GE invested $100 million as an equity partner in the project.
“Both are great companies with good names and a long history of investing in the power sector,” said LS Power Executive Vice President John King. “They know how to evaluate projects and how to make good investments in the industry.”
GE invested $1.4 billion for nearly $5 billion in solar projects over the past year. It now has a 48-project, 1-gigawatt portfolio of solar projects, the company said.
The project, which should start producing commercial electricity in early 2013, qualifies for the 1603 Treasury Grant incentive program, according to King. Though the program is now expired, it means that the financiers will see a quicker return on their investment than if they were relying on the Investment Tax Credit for a return.
LS will sell the power generated by the 1,100 acres of Hyundai PV modules baking in the Arizona sun to San Diego Gas & Electric under a long-term, power-purchase agreement. Fluor Corp. will provide the engineering, procurement and construction services for the project, according to LS Power.
It’s the first utility-scale project for the company and its second solar project overall, according to King.
“We’ve been actively developing solar projects for the last three years,” he said. “We did our 10-megawatt White Oak project in Dover, Delaware. It went commercial in November.”
The company already is working on an even larger project and more in the pipeline.
“We’ve got our solar energy project in Imperial County, Calif,” he said. “That’s 175 megawatts. That’s a project that we have not financed yet. That’s a 2012 project.”
That project also is under contract with SDGE. However, the company is not disclosing additional information about the financing of that project at this point.
“We’ve got quite a bit of development in natural gas power plants as well. We’re continuing to develop solar projects, too,” King said.
How the company moves forward with future developments will depend on what the market demands, he said.