Tesla has signed a long-term power purchase agreement (PPA) with ContourGlobal covering approximately 1TW-hour (TWh) per year of renewable electricity from Project Sterling, a hybrid solar and battery storage project in Arizona, US.

The agreement is reportedly one of the largest solar-plus-battery corporate PPAs ever signed for a single US facility, with supply coming from the largest renewable plant in ContourGlobal’s portfolio.

The Sterling Project combines 509MW-peak (MWp)/450MW-alternating current (MWac) of solar photovoltaic (PV) generation with 360MW/1.4GW-hours (GWh) of battery energy storage.

The facility is located on the Western Area Power Administration grid and will have firm transmission rights into the California Independent System Operator electricity market.

Under the agreement, Tesla will receive around 90% of the plant’s annual output, bundled with renewable energy certificates (RECs).

ContourGlobal acquired Sterling in December 2024 when it was still in development and has since reshaped its design to suit Tesla’s requirements.

Major off-site construction work for the project started in 2025, which included sourcing key equipment in June.

On-site construction is expected to begin later this year, with commercial operations targeted for 2028.

Once operational, Sterling is set to become ContourGlobal’s largest renewable energy asset.

ContourGlobal CEO Antonio Cammisecra said: “After starting operations of our first renewable plant in the US in 2025, we are now moving ahead with the construction of our largest renewable project globally, located in one of the country’s most dynamic energy markets.

“Securing our biggest PPA ever, and one of the largest of its kind in US renewable history, with an iconic customer like Tesla, a true symbol of the global energy transition, is a testament of our ability to deliver tailor-made solutions to our customer’s energy needs.

“This milestone represents a remarkable achievement of our commercial team, which spearheaded a company-wide effort to strike a major deal like this one.”

In a related development, Tesla will also purchase the entire output of the 140MWac Lumen Farm solar plant in north-east Texas, US, via a new PPA.

Construction at Lumen Farm is scheduled to begin in 2027, with full operations expected by 2029.

The latest deal builds on earlier agreements between Zelestra and Tesla, which include a 57MWac PPA signed in 2024 for solar projects in Spain’s Castilla-La Mancha region.

Last month, Zelestra signed a new PPA with Meta for the 180MW-direct current Palmera Solar Plant in Freestone County, Texas.