Vesper Energy has closed about $1.09 billion to build Hornet Solar, a 600 MWac project in Texas. Banks lent $590 million of it. The other $500 million did not come as a loan or as equity. It came from selling tax credits the project has not yet earned, for power it has not yet produced.
Key takeaways
- Vesper Energy secured a financing package of about $1.09 billion, announced on 31 January 2024, for the 600 MWac Hornet Solar project in Texas, made up of a $590 million construction-to-term loan and a $500 million production tax credit (PTC) sale.
- The Hornet Solar lenders and investors were MUFG Bank, Associated Bank, Santander Corporate & Investment Banking, Nord/LB, BayernLB and Advantage Capital.
- CCA Capital advised Vesper Energy on the Hornet PTC transfer, Stoel Rives was Vesper's legal adviser, Winston & Strawn acted as lender counsel and Milbank acted as transfer counsel.
- The Hornet Solar package equals about $1.82 million per MWac in total, of which the bank loan accounts for about $0.98 million per MWac and the tax credit sale about $0.83 million.
- Hornet's $500 million PTC sale is larger than any project-level solar tax credit transfer that Enerdatics' Leap database records in the US across 2023 and 2024, where the largest standalone transfer was about $300 million for Tierra Bonita.
How can a solar project sell tax credits before it generates power?
By contracting the sale now and delivering the credits later. A production tax credit pays a set amount for every megawatt hour a project generates during its credit period. Under transferability, introduced by the Inflation Reduction Act, a developer can sell those credits for cash to a buyer with a tax bill, instead of using them itself or bringing in a tax equity partner.
For a project under construction, the buyer commits today to purchase credits that will be created once Hornet is running. The commitment is bankable because it is contracted. That is what lets the PTC sale sit alongside the loan as a source of construction-period capital, and why Vesper describes the structure as one that combines debt and PTC transfer to optimise capital recycling and monetisation efficiency.
The choice of PTC over the investment tax credit also matters. The investment tax credit is a one-off percentage of the cost of building a project. The PTC rewards output instead. Choosing it is a bet that Hornet's output, not its build cost, is the better base for the credit.
Why does the loan cover so little of Hornet's cost?
Because the tax credit sale is doing a large part of the work. The $590 million loan works out at under $1 million per MWac. That is notably lower than the bank financings for two comparable US solar projects recorded in Leap around the same time.
Greenbacker's financing for the 674 MW Cider project in October 2024 totalled about $951 million, almost all of it debt, or roughly $1.41 million per MW. Primergy's $588 million debt package for the 408 MW Ash Creek project in March 2024 came to about $1.44 million per MW. Capacity units differ between records, so these are directional comparisons rather than exact ones. Even so, Hornet's banks are lending noticeably less per megawatt, and the PTC sale fills the gap.
The closest structural comparison is Arevon's Eland 2 solar and battery project. Its package, announced in February 2024, was almost the same size at about $1.085 billion, but the non-debt slice was $431 million of tax equity rather than a credit sale. Tax equity means an investor takes an ownership stake in the project to use its credits. Eland 2 and Hornet raised similar totals by two different routes.
How big is a $500 million tax credit sale?
For a single solar project, very big. Enerdatics' data shows 16 solar tax credit transfers in the US across 2023 and 2024 recorded as standalone transactions. The largest tied to a project is Ashtrom's sale of about $300 million for Tierra Bonita in Texas in October 2023. Only First Solar's manufacturing credit sales, $700 million to Fiserv and $645 million to Visa, are larger, and those come from factories, not power plants. Hornet's $500 million, logged within a hybrid package rather than as a standalone transfer, would sit above every project in that list.
Manufacturing transfers have a different logic. First Solar sold its 45X module credits to Fiserv for credits already earned on 2023 output. Hornet's credits are earned only as the project generates, so the buyer is also taking a view on how the plant will perform.
What does the deal signal for US solar financing?
It signals that tax credit transfers have moved from a supplement to a pillar of construction finance. When the credit sale is nearly as large as the bank loan, the capital stack has changed shape. The project is no longer funded by debt with a little help from tax benefits. It is funded by two sources of roughly equal weight.
It also signals how lenders view contracted credit sales. Six banks and investors, several of them European, committed to a structure in which almost half the money depends on a tax credit buyer performing for years after construction ends. That is a vote of confidence in transferability as a durable financing route rather than a one-off.
The adviser line-up shows the credit sale was run as a transaction in its own right. CCA Capital advised Vesper on the PTC transfer and Milbank acted as transfer counsel, separate from Winston & Strawn as lender counsel and Stoel Rives as Vesper's own legal adviser. A tax credit sale of this size now carries its own advisory track alongside the debt.
Large packages that combine several sources are becoming common in US solar, and they need to be read in layers. Excelsior stacked $1.4 billion on its Faraday solar farm from loans and tax equity in two same-day deals. Hornet does something similar with a credit sale instead. In both cases the headline total tells only part of the story.
Frequently asked questions
How much financing did Vesper Energy raise for Hornet Solar? Vesper Energy secured about $1.09 billion for the 600 MWac Hornet Solar project in Texas, consisting of a $590 million construction-to-term loan and a $500 million production tax credit sale.
Who financed the Hornet Solar project? MUFG Bank, Associated Bank, Santander Corporate & Investment Banking, Nord/LB, BayernLB and Advantage Capital took part. CCA Capital advised Vesper on the tax credit transfer.
How large is the Hornet Solar project? Hornet Solar is a 600 MWac solar project in Texas that is expected to generate power for about 160,000 homes a year.
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