Tesla Inc. has committed to buying the majority of power from a large solar and battery installation in Arizona, ContourGlobal said in a company announcement on Tuesday. Under the long-term contract, Tesla will receive 90% of the electricity produced by the project, known as Project Sterling.
Project Sterling is slated to begin commercial operations in 2028. The facility will include 509 megawatts of peak solar generation capacity paired with 360 megawatts of four-hour battery storage. The companies did not reveal any financial details of the agreement.
The plant will connect to the grid managed by the Western Area Power Administration and will have access into California. ContourGlobal, which acquired the project in late 2024, intends to market the remaining 10% of the facility's output on its own. With this addition, Project Sterling will be the largest renewable asset in ContourGlobal's portfolio.
ContourGlobal described the arrangement as the first direct power purchase agreement between the developer and Tesla. The companies indicated that contracts of this type typically last between 10 and 15 years, a common duration for utility-scale power purchase agreements.
The announcement also comes amid projections from the US Energy Information Administration that average electricity prices for consumers will rise 4.3% this year, reaching a record 14.22 cents per kilowatt-hour in the dataset that extends back to the late 1990s. The EIA projection was cited in the context of broader energy market conditions.
Operational timing, capacity specifications, ownership status, and the split of output between Tesla and ContourGlobal are the principal details provided. Beyond those points, the parties did not supply additional commercial terms or further operational specifics at the time of the announcement.
Context and implications
The agreement secures a substantial portion of Project Sterling's future output for Tesla while leaving ContourGlobal responsible for selling a limited share directly. The grid connection via the Western Area Power Administration and access to California were highlighted as part of the project's market linkage.
No new timelines, pricing, or downstream contractual arrangements were disclosed, so market participants will rely on the stated 2028 start date and capacity figures until further updates are provided.