Tesla signs long-term power purchase deal with KKR-backed Arizona solar plant
Tesla has agreed to buy 90% of the output from ContourGlobal's KKR-backed "Project Sterling" solar-and-battery plant in Arizona under a long-term contract — an unusual move for a company that has historically avoided large, long-term power purchase agreements, coming amid a broader surge in demand for such deals driven by AI data centers.
ContourGlobal announced on July 27 that Tesla has agreed to purchase 90% of the output from its Project Sterling plant, currently in development in Arizona.
The KKR-backed facility will feature 509 megawatts of peak solar generation paired with 360 megawatts of four-hour battery storage, and is set to begin operations in 2028. It will connect to the Western Area Power Administration grid with access to California, and will become the largest renewable asset in ContourGlobal's portfolio once complete.
Financial terms, including price and contract length, were not disclosed, though power purchase agreements of this type typically run 10 to 15 years. The deal marks a departure from Tesla's usual reluctance to sign large, long-term PPAs.
The agreement comes amid a broader wave of long-term power purchase deals in the U.S. as demand surges alongside the expansion of AI data centers — a trend Tesla is now joining.
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