Tesla Secures 90% of Output for Arizona Solar and Storage Project
The 450-megawatt Project Sterling includes 1.4 gigawatt-hours of battery storage and is expected to come online in 2028.
Tesla has entered into a long-term power purchase agreement to buy approximately 90% of the expected electricity output from Project Sterling, a large-scale solar and battery storage facility currently under construction in Arizona.
What Happened
ContourGlobal held a groundbreaking ceremony on October 6 for Project Sterling, located about 20 miles north of Lake Havasu City in Mohave County. The project, which spans more than 2,000 acres in the Mojave Desert, is expected to become operational in 2028. It will feature more than 760,000 solar panels with a combined DC capacity of 509 MW, providing 450 MW of AC capacity for the grid.
The facility will also include over 300 battery storage containers using lithium iron phosphate (LFP) technology with liquid cooling and integrated fire protection. These batteries are designed to deliver up to 360 MW and store around 1.4 gigawatt-hours of electricity, allowing for a full-power discharge duration of approximately four hours. ContourGlobal states that the combination of solar and storage will enable the plant to deliver clean electricity for up to 16 hours a day.
Why It Matters
Once online, Project Sterling is expected to generate more than 1.1 terawatt-hours (TWh) of electricity annually. Tesla’s agreement covers about 1 TWh per year, along with the associated renewable energy certificates, effectively securing the vast majority of the plant's output. This deal marks Project Sterling as ContourGlobal’s largest renewable energy asset worldwide.
The project also strengthens the energy link between Arizona and California. Sterling will connect to the Western Area Power Administration’s grid and has secured transmission rights into the California Independent System Operator’s electricity market. The privately financed project has secured an equity bridge loan from a group of international banks and is expected to employ around 400 workers through 2028, including crews building a new 5.2-mile access road to historic Route 66.
The Bottom Line
Tesla’s commitment to purchase 90% of Project Sterling’s output underscores its ongoing strategy to secure renewable energy sources for its operations. With construction underway and completion targeted for 2028, the facility represents a significant expansion of utility-scale solar and storage infrastructure in the American Southwest.
