CPS Energy, the utility serving San Antonio, has signed up the 150 MW Exodus 1 solar project for 25 years. In Texas, where most solar contracts are signed by technology companies and manufacturers, that is a long time. It is ten years longer than the typical contract in the same market, and longer than CPS Energy's own earlier solar deals.
Key takeaways
- Genesis Consolidated Industries Holdings (GCI Holdings) announced on 22 January 2024 a 25-year power purchase agreement with CPS Energy for the 150 MW Exodus 1 solar project in Caldwell County, Texas.
- The Exodus 1 solar project will supply 150 MW of renewable energy to the Greater San Antonio area, in the ERCOT power market.
- At the time of the Exodus 1 agreement, CPS Energy had 551 MW of operating solar capacity and had secured an additional 730 MW of contracted solar, including Exodus 1.
- CPS Energy's earlier solar PPAs recorded in Leap, for the 235 MW Tierra Bonita project in 2022 and the 100 MW El Patrimonio project in 2023, each run for 20 years, five years shorter than Exodus 1.
- The tariff for the CPS Energy and GCI Holdings Exodus 1 PPA has not been disclosed.
What does Exodus 1 add to CPS Energy's solar position?
It adds about a fifth of the solar CPS Energy had contracted but not yet brought online. Exodus 1's 150 MW is part of a 730 MW pipeline of contracted solar on top of 551 MW already operating.
Put together, those figures take CPS Energy's solar position to about 1,281 MW once the contracted projects are running, more than twice its operating base at the time. The project is intended to reduce carbon emissions and strengthen the grid's resiliency in San Antonio.
Resiliency has a specific meaning in Texas. ERCOT, the grid operator for most of the state, runs a largely isolated network with limited connections to neighbouring grids. A utility serving a large city in ERCOT cannot rely on imports in a crisis, so it has an interest in owning or contracting supply close to its customers.
Why would a utility sign for 25 years when corporates sign for 15?
Because a utility buys power for a different reason than a corporate does. A power purchase agreement, or PPA, is a long-term contract to buy electricity from a specific project at an agreed price. For a corporate buyer, a PPA is usually a hedge and a way to claim renewable supply against an emissions target. Those targets are often set a decade or so ahead, and few companies want to commit beyond the horizon they can plan for.
A utility is buying the electricity itself, to serve customers who will still need power in 25 years. Its planning horizon is tied to the life of the generating assets it relies on. A contract that runs for most of a solar farm's working life matches that horizon, and it replaces the need to build and own the plant.
For the developer, the length is valuable in a different way. A 25-year contract with a utility gives lenders more years of contracted revenue to lend against than a 15-year deal with a corporate. That can support more debt and lower financing costs for the project. The trade-off is that the seller gives up the chance to sell the output at a higher price later in the project's life.
CPS Energy's own record shows the term getting longer. Its 235 MW Tierra Bonita contract with Kenlov Renewable Energy and Ashtrom in September 2022 runs for 20 years. Its 100 MW El Patrimonio contract with Ashtrom and OnPeak Power in February 2023 also runs for 20 years. Exodus 1, signed eleven months later, runs for 25. It also brings in a new counterparty: Ashtrom was a supplier on both earlier contracts, while Exodus 1 comes from GCI Holdings. CPS has since applied 20-year terms to storage, with tolling agreements for Eolian's 350 MW Ferdinand and Padua 2 batteries in August 2024 and OCI Energy's 120 MW Alamo City battery in December 2024.
Enerdatics records 75 solar PPAs in the ERCOT market announced across 2023 and 2024. Only 25 disclose a duration, and the median among them is 15 years. Just two run for 25 years: Exodus 1 and Meta's 240 MW contract with Iberdrola for the True North project in March 2023. Seven of the 75 have a utility or power company as the buyer, and CPS Energy accounts for two of those. The rest are dominated by corporate buyers, including Amazon, Microsoft, Google and Meta, and the corporate contracts in this sample that disclose a term most often run for 12 to 15 years.
What does the deal signal for Texas solar?
It signals that municipal utilities remain a distinct source of long-dated demand in a market led by corporate buyers. Developers chasing corporate offtake in ERCOT compete for contracts of about 15 years. A utility such as CPS Energy offers a different product: a longer term with a counterparty whose customers are tied to a fixed service area. The corporate side of the market is visible in deals such as the four corporate contracts behind Ørsted's Mockingbird solar project, each between 10 and 15 years.
It also signals how little of the price is visible. Neither the tariff nor the expected annual output of Exodus 1 has been disclosed. None of the 75 ERCOT solar PPAs in the sample carries a disclosed tariff in Leap either. The length of the contract is one of the few terms that can be compared, and on that measure Exodus 1 sits at the top of the range.
Frequently asked questions
How long is the CPS Energy PPA for Exodus 1? The PPA between CPS Energy and GCI Holdings for the 150 MW Exodus 1 solar project runs for 25 years.
Where is the Exodus 1 solar project? Exodus 1 is located in Caldwell County, Texas, and will supply renewable energy to the Greater San Antonio area in the ERCOT market.
How does Exodus 1 compare with other Texas solar PPAs? Across ERCOT solar PPAs from 2023 and 2024 with a disclosed duration, Enerdatics records a median of 15 years. Exodus 1 is one of only two at 25 years.
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