Excelsior Energy Capital has closed about $1.4 billion of financing for Faraday, a 685 MW solar farm with a battery attached, under construction in Utah. The power goes to PacifiCorp, which passes it on to Meta. The package arrived as two separate deals on the same day, one from nine banks and one from a single tax equity investor. Added together they look like one very large number. Read in layers, part of that number is the same money counted twice.
Key takeaways
- Excelsior Energy Capital closed a $1.01 billion financing package on 28 November 2023 for the 685.30 MW Faraday solar project in Utah County, Utah, made up of a $460 million loan, $250 million of ancillary facilities and a $300 million tax equity bridge loan.
- U.S. Bancorp Impact Finance provided a separate $400 million of tax equity for Excelsior's Faraday solar project through a solar PTC partnership, taking the total financing announced for the project to about $1.41 billion.
- The Faraday solar financing is the largest single investment made by Excelsior Renewable Energy Investment Fund I, which is fully deployed across 1.9 GW of operating and in-construction projects in 10 US states.
- Faraday Solar has a 150 MW co-located battery, was acquired by Excelsior in 2023 from Parasol and Clenera, and is expected to begin operating in the third quarter of 2025 under a long-term contract with PacifiCorp, which will allocate the power to Meta.
- The Faraday debt package was provided by MUFG, Nord/LB, DNB, Zions Bank, Sumitomo Mitsui Banking Corporation, Societe Generale, CIBC, Huntington Bank and National Bank of Canada.
How do the two Faraday financings fit together?
As a construction loan and a long-term investor, with a bridge in between. Leap logs them as two records, and the headline $1.4 billion is the sum of both: the $1.01 billion bank package and the $400 million of tax equity.
Tax equity is an investment from a party that can use the federal tax credits a project generates, in exchange for a share of its early cash flows. It usually funds when the project is completed. Until then, a developer needs cash to build. A tax equity bridge loan fills that gap. Banks lend against the tax equity investor's commitment during construction, and the loan is typically repaid when the tax equity investor puts its money in.
That is why the two figures should not simply be stacked. The $300 million bridge inside the bank package exists because the $400 million of tax equity is coming later. If the bridge is repaid from that tax equity, as such bridges generally are, the new long-term capital in the stack is closer to $1.11 billion than $1.41 billion. Leap's records do not state the repayment terms, so the overlap is a matter of structure rather than a disclosed figure.
The ancillary facilities are a third layer. Facilities of this kind usually cover letters of credit and similar support that utilities and grid operators require from a project, rather than construction spending itself. They add to the size of the package without all being drawn as cash.
What does a PTC partnership change?
It ties the investor's return to how much power Faraday produces. The production tax credit, or PTC, pays a project per MWh of electricity it generates for its first ten years. The alternative, the investment tax credit, is a one-off credit based on how much the project cost to build. A solar PTC partnership makes the tax equity investor a partner in the project's output rather than its build cost.
For a large solar farm in a sunny location, the PTC can be worth more than the investment tax credit, because output is high relative to cost. It also means the investor carries some generation risk. A cloudier year earns fewer credits. U.S. Bancorp Impact Finance chose to take that exposure on a project with a contracted buyer behind it.
The contract sits at the base of the whole structure. Faraday sells to PacifiCorp under a long-term agreement, and PacifiCorp allocates the power to Meta. The lenders are therefore relying on a regulated utility as counterparty, with a technology company as the ultimate user. Enerdatics has covered another PacifiCorp-contracted project financing in its analysis of how a 30-year PacifiCorp contract carries Innergex's Boswell Springs wind debt.
How large is the Faraday package against other 2023 solar financings?
Among the largest for a single project that year. Per MW of solar capacity, before counting the battery, the combined $1.41 billion works out at about $2.06 million per MW. Stripping out the bridge loan brings it to about $1.62 million per MW. The battery and the ancillary facilities both sit inside those figures, so neither is a clean cost of building solar.
Enerdatics records 34 US solar financings of $400 million or more announced in 2023. Many are corporate facilities or portfolio raises rather than funding for one named project. Among the project-level deals, Copia Power raised $1.2 billion of debt in December for two projects, Harquahala Sun 1 and 2, and Clearway raised $1 billion in April for the Victory Pass and Arica solar farms. Swift Current Energy's $779 million for Double Black Diamond in August, Aypa Power's $535 million for Vidal in December and Arevon's $529 million for Vikings in November were each for a single project. Faraday's two records, at $1.41 billion combined, are the largest single-project total in that set.
Excelsior was also raising new equity that year. In March 2023 it held a $502 million first close of its Renewable Energy Investment Fund II, as Fund I reached full deployment with Faraday as its largest asset.
What does the deal signal for US solar financing?
It signals how large solar-plus-storage projects were funded in 2023: bank construction debt, a bridge against future tax equity, and a tax equity investor taking a share of the credits. Nine banks on the debt and one specialist on the tax equity is a familiar split. Enerdatics' analysis of Plus Power's $1.8 billion financing for Texas and Arizona batteries shows the same combination of debt and tax equity in storage.
It also shows the role of corporate demand. Meta does not appear as a direct counterparty in the financing, but its demand sits behind the PacifiCorp contract that lenders rely on. Here a technology buyer sits behind the revenue certainty that made a package of this size possible.
The advisers reflect the layers. Akin Gump Strauss Hauer & Feld acted as Excelsior's legal counsel, CRC-IB advised on commercial and structuring matters, Sheppard, Mullin, Richter & Hampton advised U.S. Bancorp Impact Finance, and Winston & Strawn advised the lenders.
Frequently asked questions
How much financing did Excelsior raise for Faraday Solar? Excelsior Energy Capital closed a $1.01 billion package from nine banks and $400 million of tax equity from U.S. Bancorp Impact Finance on 28 November 2023, about $1.41 billion in total.
Where is the Faraday solar project and who buys its power? Faraday Solar is a 685.30 MW ground-mounted solar project with a 150 MW co-located battery in Utah County, Utah. It has a long-term contract with PacifiCorp, which will allocate the power to Meta.
When will Faraday Solar start operating? Faraday Solar was under construction at the time of the financing and is expected to enter operation in the third quarter of 2025.
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