Wells Fargo’s renewable energy and environmental finance group closed a tax equity financing for the Arroyo Solar and Storage project with D. E. Shaw Renewable Investments (DESRI). According to Wells Fargo, once operational, the Arroyo project — a 300 MW_AC solar and 150 MW_AC/600 MWh battery energy storage system facility being developed in McKinley County, NM — will be one of the largest solar and battery projects in the United States.

This is Wells Fargo’s first tax equity investment in a project with co-located battery storage, and DESRI’s first solar project with co-located battery storage to enter construction and financing. DESRI acquired the project from the original developer, Centaurus Renewable Energy.

The Arroyo project is currently under construction, with efforts being made to hire workers locally and from the Navajo Nation. The project is expected to generate as many as 250 jobs during construction.

The Arroyo project has two offtake contracts with Public Service Company of New Mexico (PNM) for the solar and storage output. The facility is expected to generate enough clean energy to power approximately 83,500 homes each year, according to metrics provided by the Environmental Protection Agency. The solar and energy storage will supply a portion of the replacement capacity needed to retire the 847 MWac San Juan generating facility, a coal plant located in San Juan County, NM.

“DESRI is thrilled to continue to grow our relationship with Wells Fargo to invest in strong assets like the Arroyo project,” Thomas de Swardt, chief commercial officer of DESRI, said. “Arroyo is a keystone project for our companies given the incorporation of energy storage as well as the important role that the facility will play in New Mexico’s energy transition.”

“Moving towards a low-carbon future and combating climate change are important initiatives for Wells Fargo,” Philip Hopkins, head of Wells Fargo’s renewable energy and environmental finance group, said. “We’re proud to use our resources in a meaningful way to invest in projects like Arroyo that contribute to that goal.”

Wells Fargo recently surpassed $12 billion in cumulative tax-equity investments in more than 500 wind, solar and fuel cell transactions. As of November 2020, Wells Fargo’s investments provided 13% of all wind and solar capacity in the United States over a 10-year period, according to the company. In March, Wells Fargo announced a goal of net zero greenhouse gas emissions — including its financed emissions — by 2050, as well as plans to deploy $500 billion of financing to sustainable businesses and projects by 2030.

Sundt Construction is constructing the Arroyo solar facility, which will use Nextracker smart solar trackers. ECI of Billings, MT, is providing the design for the substation and switchyard, which will be built by its subsidiary, EPC Services Company. Tesla will supply and commission megapacks for the facility, and New Mexico-based Affordable Solar Installation will construct the battery energy storage system. In addition, SOLV Energy and Tesla will provide ongoing operations and maintenance services to the facility once it is operational.