The company has purchased enough inverters to ensure that more than 2 GW of projects will qualify for the full 30% Federal Investment Tax Credit, becoming at least the second company to make such a move in this week alone.
In a move that feels equal parts sound business investment and Doomsday preparation, 7X Energy has purchased 2 GW of Freesun HEM inverters from Power Electronics.
The purchase represents an investment of more than $100 million by 7X Energy and is being done to ensure that more than 2,000 MWac of projects set to be developed by 7X Energy will qualify for the full 30% Federal Investment Tax Credit (ITC), which is set to step down with the dawn of the new year. The way it works is that so long as projects have reached a set point in development by that 2020 target, thy will fully qualify for the ITC, even if they are not completed for a couple more years down the line.
7X Energy claims that this procurement represents one of the largest purchases by an independent solar developer in the United States, and it is certainly the biggest U.S. inverter buy known to pv magazine.
“Recognizing the need to ‘safe harbor’ equipment as the ITC begins its step-down process, we took the lead early in the year before supply ran out to ensure our contracted and un-contracted projects will maintain the 30 percent tax credit for our energy buyers over the next several years,” said Clay Butler, President and CEO of 7X. “We chose to safe harbor the Freesun inverter by Power Electronics to avoid the price volatility around modules and because we liked the storage readiness aspect of the inverter allowing us to add storage easily to our projects.”
This news comes just two days after SunPower made a safe harbor buy of its own, entering into a joint venture with Hannon Armstrong to acquire and deploy 200 MW of safe harbored panels. For SunPower, the safe harbor facility is expected to preserve 30% ITC value for projects placed in service from now through mid-2022.
This is what we at pv magazine call a trend: companies are and should be hoarding materials so that they can get as much of the ITC as they can on their projects for as long as they possible can. It’s a sound business strategy: why pay more if you don’t have to?
The sheer scope of the buy by 7X is wildly impressive, and the developer estimates that they will be able to reap the credits of the purchase through the next three years. 7x currently claims to have 1,500 MW of solar projects either under construction or in operation, meaning that the inverters purchased will be used to ensure the credits for projects that are currently in the earliest stages of development.