Facebook is now the proud owner of a massive solar farm
The deal represents another new twist in the corporate renewables movement.
This article is adapted from our newsletter Energy Weekly, running Thursdays. Subscribe here.
Facebook, long a leader in renewable energy procurements, just announced its first direct investment in a renewable energy project.
And it’s a big one. The Prospero Solar project in Andrews County, Texas, expected to be completed in 2020, will be one of the largest solar farms in the United States, with a capacity of 379 megawatts. The total financing behind the project is $416 million. It will cover a whopping 4,600 acres — delivering $21 million in local property taxes.
While corporate renewable procurements have been on the rise, today’s announcement is notable for its unusual deal structure. Facebook, which has a goal to be powered by 100 percent renewable energy by 2020, usually signs power purchase agreements (PPAs) to acquire clean energy. Departing from that pattern, Facebook will be the sole tax equity investor for this project, developed by Longroad Energy. (Facebook recently announced that it is supported by 75 percent renewable energy.)
The deal shifts Facebook’s role from energy subscriber to asset owner, a rarity in the corporate procurement world that could be a model for how other companies could procure renewable energy.
"We hope such investments can be a new avenue of meaningfully engaging with projects, which might be easier for some companies than a long-term power purchase agreement, thereby unlocking new options for more organizations to meet their goals and grow the market," said Peter Freed, energy strategy manager at Facebook, in a statement released by the company.If we are going to grow this market to 50,000 buyers, we will need flexible mechanisms like this to meet the needs of the diverse buyers in the marketplace.
Interestingly, Shell Energy North America signed a 12-year PPA for the clean power generated by the project, one of the first off-take agreements of this type in the solar industry, Facebook said in the press release. The two companies will "share" the renewable energy "attributes" being created by the project.
More than half of Fortune 500 companies have some renewable energy goal, so it makes sense that more business models and structures will emerge to fit more use cases. While Facebook’s renewable capacity deals are larger than what many other companies need, the proliferation of options is a sign of market maturation.
"As an organization focused on accelerating the deployment of clean renewable energy procurement across all markets, the Renewable Energy Buyers Alliance (REBA) was excited to see Facebook’s new approach to meeting its renewable energy goals at the utility scale," said Miranda Ballentine, CEO of REBA, in an email. "If we are going to grow this market to 50,000 buyers, we will need flexible mechanisms like this to meet the needs of the diverse buyers in the marketplace."
Watch this space to see what other innovations companies come up with.