Electrify America–backed 75MW solar farm kicks off operations

Harri Weber
Tue, August 15, 2023 

Image Credits: Mario Tama / Getty Images

Electrify America, the EV charging company created by Volkswagen in the aftermath of its diesel emissions scandal, said on Tuesday that a new, 75 megawatt solar farm in Southern California is now up and running.

Electrify America isn't operating this solar farm. Instead, the company struck a 15-year virtual power purchase agreement (VPPA) with renewable energy developer Terra-Gen. It's the latest development in Electrify America's efforts to link itself to renewable energy projects. The firms broke ground on the plant back in February.

Your typical VPPA involves a buyer, which pays a fixed price for whatever energy is generated, and a seller, which generates the energy and sells it via the grid for the buyer at market rates. The buyer assumes some risk, because the seller might wind up selling the energy below the fixed rate. Yet, the buyer could also see the upside if market prices trend above the fixed rate.

In other words: Electrify America is taking on some risk with this deal, and in exchange it gets to say it's helping clean up the grid while potentially benefiting from rising energy prices.

Renewable energy developers play a crucial role in decarbonizing the grid, but just how far do VPPAs go in mitigating climate change? This seems to be an open question. Even Electrify America's press release leaves some wiggle room on this front: "This brand new construction contributes to 'additionality,' by producing new renewable energy that may not otherwise be available," the company said in a statement (emphasis ours).

Might another buyer have stepped in if Electrify America hadn't? Like any offset-related deal, it's difficult to say whether the agreement is facilitating something that definitively would not have happened otherwise. (If you are aware of any academic studies on the environmental impact of VPPAs, please get in touch at harri.weber@techcrunch.com.)

For its part, Electrify America states that the peak energy its investment will generate is "comparable to the power drawn by 500 EVs charging at once at an average speed of 150 kilowatts." The solar farm's annual "production is projected at 225 Gigawatt-hours," Electrify America adds. In an earlier press release, the firm claimed the outcome of this deal will be "comparable to the carbon sequestered by planting nearly 40 million trees."

Siemens to make solar energy equipment for US market in Wisconsin
Reuters
Tue, August 15, 2023 


(Reuters) - German conglomerate Siemens said on Tuesday it will start producing solar energy equipment in the United States in 2024 through a contract manufacturer in Wisconsin.

The announcement marks a move by one of the world's largest manufacturers to capitalize on incentives in President Joe Biden's year-old landmark climate change law to boost American-made supplies of solar energy components and compete with China.

Siemens will produce solar string inverters, devices that convert energy generated from solar panels into usable current, for the U.S. utility-scale market, it said in a statement. The products will be made at a facility in Kenosha, Wisconsin, operated by Sanmina.

"Working with Sanmina to establish this new production line, Siemens is well positioned to address supply challenges our country is facing as we work to localize production for green and renewable infrastructure," Brian Dula, vice president of electrification and automation at Siemens Smart Infrastructure USA, said in the statement.

The work for Siemens will create up to a dozen jobs at the factory to start, the company said. Production will scale up to a capacity of 800 megawatts of inverters per year.

The Inflation Reduction Act has unleashed $100 billion in investment in the domestic solar sector in the last year, including $20 billion for solar and storage manufacturing, the top U.S. solar trade group said this week.

More than 50 solar manufacturing facilities have been announced or expanded since the IRA passed, according to the Solar Energy Industries Association study. That includes about 7 gigawatts of inverter capacity.

IRA tax credits incentivize both producers and buyers of domestically made clean-energy equipment. For example, solar projects that use American-made equipment, including inverters and other components, can qualify for a bonus tax credit worth 10% of the project's cost.

(Reporting by Nichola Groom in Los Angeles; Editing by Matthew Lewis)