Tesla buys power from KKR-backed Arizona solar-plus-storage project

Tesla Inc. agreed to buy electricity from a KKR-backed solar and battery storage project in Arizona, the latest in a series of clean-energy deals as the electric-vehicle maker's power demand grows from factory expansion and AI computing.

"This agreement supports our commitment to power our US operations with renewable energy," a Tesla spokesperson said, declining to disclose the project's capacity or the contract's financial terms. KKR declined to comment.

The Arizona project combines solar generation with battery storage, enabling round-the-clock clean power delivery. The deal was announced alongside a separate 140-megawatt power purchase agreement between Tesla and Zelestra for the Lumen Farm solar project in Texas, which is expected to begin construction in 2027 and reach full operations by 2029. Tesla also signed a 57-megawatt PPA with Zelestra in 2024 covering three solar plants in Spain's Castilla-La Mancha region.

Tesla is competing with hyperscale data center operators for renewable energy supply in US markets where its electricity load is growing fastest. The company operates Gigafactory Texas near Austin and is expanding AI compute infrastructure, both requiring large, round-the-clock clean power. KKR, one of the world's largest alternative asset managers with $518 billion in assets under management, has been expanding its renewable energy portfolio across North America through direct investments and platform acquisitions.

The Arizona deal adds to a busy period for corporate renewable procurement in the US, where demand from technology and manufacturing companies is driving a wave of power purchase agreements. Tesla shares traded little changed in early trading. The company's energy generation and storage segment generated $1.9 billion in revenue in the most recent quarter, up 67% from a year earlier, as Megapack deployments and solar installations accelerated.

This article is for informational purposes only and does not constitute investment advice.