Solar project developer Cypress Creek Renewables LLC has agreed to sell 14 utility-scale solar farms in late-stage development in North Carolina and Oregon to Australian investment firm New Energy Solar for roughly $108 million. The "binding agreement," announced Oct. 6, involves 130 MW of capacity that Cypress Creek plans to begin building in late 2017 and bring online in 2018.
The output from 10 planned projects in North Carolina, with a combined 71 MW of installed capacity, would be sold to subsidiaries of Duke Energy Corp. under "13- to 15-year fixed price and escalating power purchase agreements," the companies said. The output of the remaining four projects in Oregon, totaling 59 MW, would be sold to Berkshire Hathaway Energy's PacifiCorp utility under the same proposed terms.
A Cypress representative did not immediately respond to a request for additional details about the projects. PacifiCorp, however, has four approved contracts with Cypress for qualifying facilities in Oregon under the Public Utility Regulatory Policies Act, or PURPA, a utility spokesman confirmed. A Duke Energy representative could not confirm the status of the proposed contracts with its subsidiaries, but pointed to a current request for proposals and "new competitive bidding process" the utility plans to launch in North Carolina next year as opportunities for Cypress.
The developer in June dismissed claims against Duke Energy's North Carolina units in a dispute over PURPA contracts. In July, North Carolina's governor signed a bill that required the development of more than 3,200 MW of solar over the next five years. To reduce its development risks, New Energy Solar's investment "will commence only after key development items have been finalized and the projects are ready to commence construction," Cypress and New Energy Solar said. The firm's investment "will be paid progressively as key milestones are achieved," they added, with final payments due for each project upon commercial operation and satisfaction of quality and performance standards.
"These high-quality projects and the proposed [contracts] with creditworthy off-takers greatly increase our scale as an investor in solar and also enhance the diversity of our portfolio," New Energy Solar CEO John Martin said in a statement. The company anticipates the portfolio to generate a five-year annual average yield of roughly 5.5%.