Swift Current Energy has raised $81 million of tax equity for its Tres Bahias solar farm on the Texas Gulf Coast. The investor is UnitedHealth Group, a healthcare company. The project already had a tax equity investor, Morgan Stanley, committed at financial close almost a year earlier. Two investors, one project, and a buyer from far outside the energy business.
Key takeaways
- Swift Current Energy secured $81 million in tax equity from UnitedHealth Group for the Tres Bahias solar project in Texas, announced on 26 March 2024.
- Tres Bahias is a 260 MWdc, or 196.3 MWac, solar project on the Gulf Coast of Texas, using First Solar modules and Array Technologies trackers, with its power sold to NRG Energy under a power purchase agreement.
- The Tres Bahias project had previously closed tax equity from Morgan Stanley Renewables and debt from ING Capital and Siemens Financial Services, with financial close reported in May 2023.
- UnitedHealth Group's $81 million equals roughly $0.41 million per MWac of Tres Bahias capacity.
- Enerdatics records 25 US solar tax equity financings announced in 2024, 15 with a disclosed amount and a median of $159 million; Tres Bahias is the third smallest of those priced deals.
What is tax equity and why would a healthcare company provide it?
Tax equity is an investment in a renewable project made mainly to use its federal tax credits. The investor puts in cash and receives most of the tax benefits the project generates, which it uses to reduce its own tax bill. That only works for a company with a large and predictable US tax liability.
For most of the market's history, that meant banks. A large healthcare company with a big US tax bill has the same need, which is what brings a company like UnitedHealth Group into a solar farm. The return comes primarily from tax savings rather than from selling power, so the investor does not need any expertise in energy markets. It needs a project with reliable output and a credible sponsor.
How can one project have two tax equity investors?
The record does not say how the two investments divide the project. It does establish the sequence. In May 2023 Swift Current reached financial close on Tres Bahias, combining debt from ING Capital with tax equity committed by Morgan Stanley. Enerdatics notes that this financing was structured to reflect new guidance under the Inflation Reduction Act. The 2024 record then states that the project had previously received tax equity from Morgan Stanley Renewables and a loan from ING Capital and Siemens Financial Services, before UnitedHealth Group's $81 million arrived.
The 2024 record describes the use of proceeds as supporting the operations of the project. Taken together, the two records point to a second tax equity investor joining a project whose original financing package was already in place. What the record cannot tell us is whether UnitedHealth Group took part of Morgan Stanley's position, added to it, or invested alongside it on new terms.
There is also a small change in the asset itself between the two records. The 2023 financing describes a 266 MWdc and 195 MWac farm due on stream by the end of 2023. The 2024 record gives 260 MWdc and 196.3 MWac, with commercial operation expected by the end of March 2024. Construction start dates also differ between the two records. The figures in this post use the 2024 record.
How does $81 million compare with other US solar tax equity?
It is at the small end. Enerdatics' data shows 25 US solar tax equity financings announced in 2024. Fifteen of them disclose an amount, with a median of $159 million and a range from $71 million to $1 billion. Only Origis Energy's $71 million for Rice Creek and Nautilus Solar's $72 million community solar raise are smaller than Tres Bahias.
At the top of the range sit very different transactions. ENGIE raised $1 billion from three banks for 1.3 GW of operating solar and wind farms in February 2024, and Orsted raised $680 million from J.P. Morgan in May. In January Origis raised $317 million from J.P. Morgan for two projects. Those are portfolio deals with bank investors. Tres Bahias is a single project with a corporate investor taking a smaller, second position.
Measured per unit of capacity, UnitedHealth Group's $81 million is about $0.41 million per MWac of Tres Bahias, or about $0.31 million per MWdc. Because the record does not give the size of Morgan Stanley's earlier commitment, the total tax equity raised against the project is not known.
Is UnitedHealth Group an outlier as a tax equity buyer?
Less than it might look. Of the 25 US solar tax equity records in 2024, five name a non-financial corporation as investor. Walmart invested in Pivot Energy's projects on the same day as the Tres Bahias announcement. Nestle invested in Enel's 326 MW Stampede solar project in Texas in August. Google invested twice in August, once in Energix Renewables' 1.5 GW pipeline and once in Swift Current's own Double Black Diamond project in Illinois.
Swift Current, in other words, has now drawn on corporate tax equity twice. Enerdatics also records it raising tax equity from PNC Bank for the 138 MW Harvest Gold project and a $300 million credit facility from a group of banks, both later in 2024. The developer is working with banks and corporates side by side.
What does the deal signal for US solar finance?
It shows the tax equity investor base widening beyond the banks. Healthcare, retail, food and technology companies all appear as investors in 2024 records. Each brings a US tax bill large enough to absorb solar credits, and none needs to own or run a power plant to do so.
It also shows that tax equity is no longer a one-time event at financial close. Tres Bahias raised tax equity in 2023 and again in 2024, with a different investor each time. That opens more routes for a developer to recycle capital as a project moves from construction into operation.
The point to watch is pricing. None of the 2024 corporate tax equity records discloses a return or a structure. If corporate investors are accepting smaller tickets on single projects, as here, the terms they accept compared with the banks will decide how much of the market they eventually take.
Frequently asked questions
How much tax equity did UnitedHealth Group invest in Tres Bahias? UnitedHealth Group provided $81 million of tax equity for Swift Current Energy's Tres Bahias solar project in Texas, announced on 26 March 2024.
Who buys the power from the Tres Bahias solar farm? The power produced by Tres Bahias is sold to NRG Energy under a power purchase agreement, according to Enerdatics.
Did Tres Bahias have earlier financing? Yes. Swift Current reached financial close in May 2023 with debt from ING Capital and tax equity committed by Morgan Stanley, and the 2024 record also names Siemens Financial Services as a lender.
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