PSEG Solar Source yesterday said it has completed the $75 million acquisition of a 25.2 megawatt solar project, located 30 miles southeast of Phoenix, AZ.
The project, developed by juwi solar Inc., a Boulder, CO, company specializing in developing utility-scale solar facilities, is expected to begin construction this month and be completed by the third quarter of 2012.
The deal to buy what will be known as the PSEG Queen Creek Solar Farm marks the fourth solar project for PSEG Solar Source, one of two Public Service Enterprise Group subsidiaries active in solar energy. The solar farm will be located on 158 acres of farmland. Panels will be mounted on a single-axis tracking system, which allows them to face the sun for more hours of the day than stationary solar panels.
PSEG Solar Source already owns the PSEG Wyandot Solar Farm, a 12-megawatt facility in Wyandot, Ohio, the largest operating solar facility in the state; the PSEG Jacksonville Solar Farm, a 15-megawatt facility on 100 acres in the Florida city and the largest solar facility in the northern part of the state; and the Mars Solar Garden, a 2.2-megawatt facility adjacent to the Mars Snackfood's U.S. headquarters in Hackettstown.
The electricity from the PSEG Queen Creek Solar Farm will by purchased by the Salt River Project Agriculture Improvement and Power District under a long-term power purchase agreement for 20 years. The company declined to reveal the cost of the electricity under the agreement.
Under separate agreements, juwi solar will engineer, procure, and build the facility, as well as perform operation and maintenance services for the project. PSEG Solar Source will own the project. It is the fourth deal the company has completed with juwi solar.
"PSEG Solar Source is pleased to add the PSEG Queen Creek Solar Farm to our portfolio of high-quality solar projects," said Diana Drysdale, president of PSEG Solar Source. She said the company will continue to seek opportunities throughout the United States to provide clean, emissions-free solar energy and to help states meet their solar and renewable targets."
Paul Patterson, an analyst who follows the company for Glenrock Associates, said PSEG clearly has the balance sheet to pursue such opportunities. "It certainly has the size, scale, and scope to competitively pursue energy infrastructure projects of all types," he said. "Given the emphasis and incentives policymakers have given renewable energy, it makes sense for them."
The Queen Creek Solar Farm will deliver a return on its investment consistent with other energy projects the company invests in, according to Drysdale. She said the company was less concerned with geography and size of projects and more focused on meeting the company's risk requirements and return for shareholders.
Still, she said the company is evaluating projects that range in size from 25 to as much as 50 megawatts of solar capacity.
Public Service Electric & Gas, a PSEG Solar Source affiliate, currently owns 52 megawatts in New Jersey. It includes 18 solar farms and more than 150,000 solar panels attached to the utility's poles. In addition, the state's largest gas and electric utility is administering a $105 million solar loan program.