Politics

Tesla Signs Major Solar Deals Amid Surging AI Power Demand

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Tesla’s ongoing electricity usage prompted two energy agreements related to solar projects in Arizona and Texas.

The solar agreements with Zelestra and ContourGlobal on Tuesday demonstrate how the company’s clean-energy strategy has evolved alongside its AI ambitions, with utility-scale projects. These deals will generate 600 megawatts of planned capacity, amid growing energy concerns.

Zelestra develops utility-scale renewable energy projects, while ContourGlobal operates power generation facilities, including large-scale solar. Both supply electricity through long-term Power Purchase Agreements (PPAs).

Tesla has signaled that its electricity demand is expected to grow as it expands its artificial intelligence operations. In its 2025 annual report, the company said it is building “Cortex 2” at Gigafactory Texas to increase its AI training compute capacity.

“After starting operations of our first renewable plant in the U.S. 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”, commented Antonio Cammisecra, Chief Executive Officer of ContourGlobal.

“Securing our biggest PPA ever – and one of the largest of its kind in U.S. renewable history – with an iconic customer like Tesla, a true symbol of the global energy transition, is a testament [to] our ability to deliver tailor-made solutions to our customers’ energy needs,” Cammisecra said in the press release. “This milestone represents a remarkable achievement of our commercial team, which spearheaded a company-wide effort to strike a major deal like this one.”

The agreement between ContourGlobal and Tesla covers a year with an output of 90%, delivering around 900 GWh operationally in 2028. Compared to the PPA with Zelestra, Tesla will have the whole 140 MWac output of the Lumen Farm, Zelestra’s solar farm.

“The Sterling solar plant highlights an engineering feat,” a ContourGlobal spokesperson told the DCNF. The energy plant will be able to provide 16 hours of continuous power per day by a combination of solar panels and battery, covering periods of power after sunset. He added that, “24/7 renewables are not that far away; it’s a matter of 12-18 months for commercial renewables. The commercial viability is not deployed yet.”

But the Lumen plant will not reach full operations until 2029. This deal expanded the relationship between Zelestra and Tesla, which received multiple agreements in 2024 in Spain.

“As a trusted global partner, we can deliver bespoke solutions for clients in multiple geographies. As such, we are excited to expand our relationship with Tesla to the US,” Phil North, Zelestra’s US CEO, told  The Daily Caller News Foundation.

Tesla did not immediately respond to DCNF’s request for comment.

“We aim to deliver the project and bring the new solar plant online as quickly as possible to support Tesla’s growing energy needs in Texas,” North concluded.

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Minnesota recently worked on phasing out one of its largest coal-powered plants in favor of solar, demonstrating the broader shift to solar amid the energy crisis in America caused by AI data centers.

The Trump administration worked on expanding its non-binding Ratepayer Protection Pledge on Thursday, which required companies to cover their energy cost, the Daily Caller News Foundation previously reported.

The Trump administration claims that with their pledge, electricity prices will decrease for everyday Americans.

“Electricity bills for American families will actually come down,” Trump said, according to the AP. “They’re going to have a lot of electricity left over, and they’ll put that into the grid.”

The agreements reflect a broader shift in the US energy sector, where technology companies are locking in long-term electricity supplies to support AI growth. That trend comes as the Trump administration argues that expanding generation capacity will ultimately make power more abundant and less expensive for American households.