The largest solar and battery project in America broke ground this week, as Cypress Creek Renewables began construction of the Steel River Energy Center in Arkansas.
The project represents a bright spot for the U.S. solar industry at a moment of political turbulence in Washington, where President Donald Trump has sought to stymie renewable development by slashing clean energy tax credits and erecting new barriers to wind and solar projects on federal lands.
But in Steel River, the solar industry can find several reasons for hope.
First is its sheer size. The project’s first two phases, which are under construction, will install 1,600 megawatts of solar and 1,900 MW of battery storage capacity, dwarfing the largest U.S. solar facility in operation today.
Google has also signed a 20-year contract to buy Steel River’s electricity output, highlighting how technology companies’ voracious appetite for power is fueling investment in everything from solar developments to gas-fired power plants. The project’s supply chain is also a boon: The vast majority of components were made in the U.S. Two Southern steel mills were involved in fabricating 400,000 pilings for the project, while American company First Solar made the solar modules.
But perhaps the most encouraging factor is Steel River’s $3.5 billion price tag. Cypress Creek acquired the project in March from Swift Current Energy, which was wary of taking such a big financial risk on a single project, said Cypress Creek CEO Kevin Smith.
Cypress Creek was ultimately able to secure financing from four banks, a bullish sign for investor confidence in the sector.
“My view is the markets are as strong as ever, continuing to push projects like this. Obviously, the electricity demand is massive and that is driving markets,” Smith said in an interview. Those trends, he added, have shielded the industry against the Trump administration’s efforts to slow renewable energy development.
“The economics and the speed to market that solar and battery storage can deliver make it the first choice to try and solve the huge increase in demand that we see,” Smith said.
That sentiment was reinforced by a recent report from Lazard, an investment bank. It found that renewables remain the cheapest form of new power generation, even without subsidies.
Steel River could grow even more. A planned third phase calls for expanding the project’s total capacity to 2,500 MW of solar and 2,900 MW of battery storage.
However, it’s unclear how many other projects will be able to follow in Steel River’s footsteps. Tax credits for wind and solar projects expired on July 4, though some projects like Steel River still qualify because they started construction before the holiday deadline. Meanwhile, technology companies are increasingly looking to natural gas, as well as nuclear, to meet the around-the-clock energy needs of new data centers.
Logistical factors also present a barrier to renewables. Projects as large as Steel River face land constraints, permitting bottlenecks and the slow pace of grid interconnections, Smith said.
He said Steel River benefited from working mostly with one large landowner, the Lawrence Group, which ranks among the country’s largest private agricultural landowners. The project also worked with a utility, Entergy, that had the capacity to plug in such a large project. Google represented the last piece of the puzzle. In agreeing to buy all the project’s output at a fixed price for 20 years, it provided a steady revenue stream that enabled Cypress Creek to secure financing for Steel Creek.
“There are going to be projects of this magnitude that are going to get spotted across the U.S., but to get to a project of this magnitude, regardless of federal regulations and all that, isn’t easy because of land constraints and really interconnection,” Smith said.
Google announced plans last year to bring online a new $4 billion data center in West Memphis, Arkansas. Mary Kay Leo, a spokeswoman for the tech giant, said Steel River would support the regional grid serving the data center. The Midcontinent Independent System Operator serves as the regional grid operator for Arkansas.
“As one of the nation’s most significant new solar plus storage projects, Steel River helps address growing electricity demand with reliable, cost-effective power, utilizing battery storage systems to strengthen grid dependability while also unlocking new clean capacity,” Leo wrote in an email.
In some ways, Steel River is a holdover from the Biden era, when Washington sought not only to boost renewable projects but incentivize the domestic manufacturing of wind turbines and solar panels. Steel River qualifies for a 10 percent domestic content bonus under the old investment tax credit.
Its solar modules are made by First Solar, which operates panel factories in Ohio, Alabama and Louisiana. The project’s racks will be made by Nextpower, a California-based manufacturer. Its battery cells were assembled by LG Energy Solution Vertech in Arizona. And more than 142,000 tons of steel coil will be produced by U.S. Steel’s facility in Osceola, Arkansas. Those coils will then be turned into steel pilings by PACO Steel in Blytheville, Arkansas.
American tax credits for domestic clean energy manufacturing remain. But the Trump administration has signaled that it intends to tighten the subsidy’s rules around how much foreign content is allowed in a project’s components. That has cast significant uncertainty over the industry, as it waits for new guidance from the IRS.
Smith sought to reframe the debate over the tax credits as one about affordability, a topic that has come to dominate political discussions in Washington.
“We don’t need it. We can compete with or without. It’s more of an affordability issue,” he said. “Do you want to raise rates, you know, because you’re raising the price of the cheapest source of energy out there? It’s going to raise rates for American citizens paying their utility bills.”
Correction: An earlier version of this report misidentified Swift Current Energy, which sold Steel River Energy Center to Cypress Creek Renewables in March. It also incorrectly identified the factories involved in the steel production process. U.S. Steel will make the steel coil used by PACO Steel to fabricate the project’s pilings.
