Highlights
- Tesla signed a long-term PPA to buy 90% of Project Sterling, a 509 MW solar and 360 MW battery project in Arizona expected online in 2028.
- ContourGlobal, owned by KKR, is building the plant and calls it the largest renewable asset in its portfolio after acquiring it in late 2024.
- Tesla contracted more than 640 MW of third-party solar and 360 MW of battery storage in a single day, adding a separate 140 MW Texas deal the same morning.
- Neither company disclosed financial terms; deals of this type typically run 10 to 15 years, locking Tesla into Arizona clean power well into the 2030s.
Tesla signed a long-term power purchase agreement to buy 90% of the output of Project Sterling, a 509 MW solar and 360 MW battery plant under construction in Arizona, according to reporting first published by Electrek on July 28 and corroborated by Bloomberg.
The plant is being built by ContourGlobal, the power producer owned by private equity firm KKR. ContourGlobal picked up the project in late 2024 and calls Project Sterling the largest renewable asset in its portfolio. The facility is expected online in 2028. ContourGlobal will retain and trade the remaining 10% of output itself.
The 360 MW battery is a four-hour system, roughly 1,440 MWh of storage, enough to keep pushing solar power onto the grid after the sun goes down. The plant connects to the Western Area Power Administration grid, which gives it access to California markets.
Neither company disclosed financial terms. Deals like this usually run 10 to 15 years, so Tesla is locking in Arizona clean power well into the 2030s.
The Arizona agreement was one of two large solar PPAs Tesla signed the same day. Earlier, Tesla and Spanish developer Zelestra confirmed a deal for the entire output of a 140 MW solar farm in Texas. Combined, Tesla contracted more than 640 MW of third-party solar, plus 360 MW of battery storage, in a single day.
The driver is the same one pushing every major hyperscaler right now: electricity demand is climbing fast, AI data centers are tightening U.S. power markets, and Tesla has its own growing load to feed, from Gigafactory Texas to its expanding AI compute.
Why is Tesla buying storage it could build itself?
Tesla manufactures the Megapack, the best-selling grid battery in the world, and already has one of Arizona's largest Megapack installations online. It also sells solar panels and is building a 100-GW solar panel factory in Texas. Yet for Project Sterling, Tesla is buying both the solar and the storage from a KKR-owned developer. Neither company said whose batteries the plant will use. Tesla builds the hardware but does not develop and operate utility-scale solar-plus-storage plants at the speed it now needs, so it is signing PPAs the same as Meta and Google.
The Bloomberg report confirmed the deal terms; the Arizona Technology Council first surfaced the story in its tech-news feed on July 28.
Sources
Every factual claim in this article traces to one of the sources below. See how we work for the editorial process.
- aztechcouncil.org retrieved 29/07/2026 20:30
Authored by The Scottsdale Signal. Drafted by AI from primary-source material under our beat-specific editorial guides; reviewed by humans before publish under our five-gate process. Sources retrieved at 29/07/2026 20:30. Every claim traces to a source.
