Rivian signs first solar purchase agreement
Rivian, the embattled EV maker, has completed its first purchase agreement with a new solar facility in Tennessee, the company tells Axios exclusively.
Why it matters: Early-stage agreements are critical in funding the construction of solar facilities, and in this case Rivian plans to use the renewable energy to power its charging stations across Tennessee's state parks, the company tells Axios.
Details: Rivian is purchasing 1 megawatt via Tennessee startup Clearloop, which matches corporations with renewable energy projects needing financing.
- The facility will produce 6.75 megawatts total once complete.
- Power production startup Silicon Ranch, which bought Clearloop in late 2021, will operate the facility.
- Both Rivian and Clearloop declined to share the valuation of the deal.
Between the lines: Rivian's purchase wasn't exactly the traditional power purchase agreement structure that most companies sign with early-stage power providers.
- Clearloop provides the upfront financing for the deal, and takes between 15% and 40% of the watt cost as revenue once the construction is complete and the plant is generating power.
- The upfront financing can help smaller projects get off the ground and secure additional financing from low-cost lenders.
💭 Our thought bubble: Though financing solar projects has become cheaper in recent years, new projects in underserved areas remain difficult to finance.
- Alternative financing models may help spur development in areas that are suitable for renewable energy but lack the policy initiatives to stimulate additional development.