Tesla Signs Two Major Solar Agreements in One Day, Securing Over 640 MW of Clean Power

Tesla recently signed a long-term power purchase agreement (PPA) to procure 90% of the electricity generated by Project Sterling. Located in Arizona, the project is being developed by ContourGlobal — an energy developer owned by private equity firm KKR — and features a planned capacity of 509 MW of solar photovoltaics plus a 360-MW battery energy storage system, with commercial operation expected in 2028.

Public information indicates the storage system is configured for four hours of duration, totaling approximately 1,440 MWh, enabling continuous nighttime power supply. The project interconnects with the Western Area Power Administration grid and has transmission capability to high-demand markets such as California. ContourGlobal will retain rights to trade the remaining 10% of output independently; financial terms were not disclosed. This marks the first collaboration between the two companies, and ContourGlobal describes Project Sterling as its largest renewable energy asset to date.

Notably, this is not Tesla's only solar agreement signed that day — earlier the same day, Tesla confirmed an agreement with Spanish developer Zelestra to fully off-take electricity from a 140-MW solar plant under development in Texas. Combined, the two agreements secure over 640 MW of third-party solar generation capacity and 360 MW of co-located energy storage — a scale rarely seen in a single-day PPA rollout.

This flurry of activity reflects Tesla's rapidly rising electricity demand: ongoing expansion at its Texas Gigafactory, coupled with accelerated deployment of AI computing infrastructure, has intensified its need for stable, low-cost green power. Although Tesla manufactures its own Megapack energy storage systems — and has already built one of its largest Megapack projects in Arizona — and is constructing a 100-GW-scale solar module factory in Texas, Project Sterling does not explicitly specify the use of Tesla hardware. Industry analysts note that opting for a PPA model rather than self-development signals a strategic priority on timely power supply assurance over vertical integration of energy assets — a move aligned with strategies adopted by tech giants including Meta and Google.

Observers believe the back-to-back signings reflect Tesla's pragmatic response to energy constraints: foregoing the 'full-stack build-out' narrative in favor of long-term PPAs to lock in green power supply through the early 2030s. As AI data centers continue straining grid headroom and electricity prices rise year-on-year (up nearly 10% YoY in 2025), large-scale solar-plus-storage integration has shifted from optional to operational necessity.