Israeli renewable energy company Energix: $1.5 Billion Deal with American giant "First Solar"

Green energy company Energix has revealed its largest deal to date, worth $1.5 billion, with American company First Solar. The agreement entails the purchase of solar panels with a total capacity of five gigawatts (GWp) for Energix's upcoming solar projects in the United States. These projects are scheduled to be built between 2030 and 2026.

As per the terms of the deal, the solar panels intended for installation in the USA will be manufactured within the country. This strategic decision not only ensures a local supply chain but also allows Energix to take advantage of a tax benefit of at least 40%.

The tax benefit is made possible due to the Inflation Reduction Act, a legislation implemented in the USA in August 2022. The act aims to promote large-scale climate and energy programs by providing long-term economic incentives. It raises the possible tax credit rate for investments, specifically the Investment Tax Credit (ITC), to 30%. An additional 10% is granted for the inclusion of equipment manufactured in the USA, and another 10% is possible for projects established in certain defined territories designated for economic development.

The tax benefit, which extends until 2032, allows Energix to leverage the incentives offered by the legislation and create a favorable financial environment for its projects. Additionally, the company has the option to sell the right to the tax benefit to a third party.

In January 2022, Energix and First Solar had previously entered into a significant agreement for the purchase of two gigawatts of solar panels at a cost of $500 million. These panels were designated for Energix's projects, primarily in the US, scheduled for construction between 2023 and 2025.

The current transaction focuses on the acquisition of solar panels for Energix's solar projects in the USA, which are currently in the initiation phase. These projects amount to 5,000 megawatts out of a total of 6,350 megawatts of solar and wind projects that are in the initiation stage.

Energix, an energy company operating in Israel, Poland, and the USA, currently has 867 megawatts of installed systems in commercial operation. Out of this total, 224 megawatts are established and operating in the US in solar projects. An additional 849 megawatts are in various stages of construction, with 556 megawatts dedicated to solar projects in the USA (Pennsylvania and Georgia) expected to begin commercial operation between 2023 and 2024. Furthermore, 469 megawatts are in advanced initiation stages, including 340 megawatts allocated to solar projects in the US, with an estimated commercial operation in 2024.

Energix's partnership with First Solar showcases its commitment to expanding renewable energy infrastructure in the United States and reinforces its position as a leading player in the green energy sector.