Tesla Signs Two Major Solar PPAs in One Day, Securing Over 640 MW of Generation and 360 MW of Storage

Tesla has recently signed a long-term power purchase agreement (PPA) with renewable energy developer ContourGlobal, securing 90% of the output from ContourGlobal’s “Sterling Project” in Arizona. The project comprises 509 megawatts (MW) of solar photovoltaic capacity and a 360 MW / 1,440 MWh battery energy storage system (BESS) with four hours of storage duration, and is expected to begin operations in 2028. ContourGlobal will retain the remaining 10% of the electricity for its own trading activities. The project will connect to the Western Area Power Administration grid and will be capable of delivering power to the California electricity market. On the same day, Tesla also reached an agreement with Spanish developer Zelestra to offtake 100% of the output from a 140 MW solar facility Zelestra is developing in Texas. Together, these two agreements lock in over 640 MW of third-party solar generation capacity and 360 MW of battery storage for Tesla in a single day. Such PPAs typically span 10 to 15 years and will ensure Tesla a stable supply of clean electricity into the 2030s. Tesla’s electricity demand continues to rise, driven primarily by the expansion of its Gigafactory in Texas and its AI computing infrastructure. Although Tesla manufactures Megapack battery systems and solar panels—and is deploying Megapack projects in Arizona while building a 100-gigawatt solar panel factory in Texas—it opted to procure power for the Sterling Project from ContourGlobal, which is owned by KKR, rather than develop the project itself. This decision reflects Tesla’s strategic focus on acting as a power buyer rather than a utility-scale solar-plus-storage developer—a stance aligned with other tech giants such as Meta and Google.