Construction has begun in Arizona on Project Sterling, a large solar-plus-storage facility whose annual output Tesla will buy at a rate of about 90%. Developer ContourGlobal announced the start of on-site work on October 7, 2026, and is aiming for commercial operation in 2028. The move takes the power purchase agreement signed in July and puts it into physical generating equipment. The plan pairs 450 MW of AC solar capacity with a 1.4 GWh battery, and the company says it can supply power for up to 16 hours a day. The project's defining feature is its design: shift daytime solar generation into the hours after sunset and deliver it to the California market as well.
From a July contract to on-site construction
The site is in the Mojave Desert in Mohave County, Arizona, north of Lake Havasu City. According to ContourGlobal's groundbreaking announcement, the project will install more than 760,000 solar modules and more than 300 battery containers. The batteries will use lithium iron phosphate (LFP) technology, with liquid cooling and fire protection systems planned.
The plant as a whole is expected to generate more than 1.1 TWh a year, or over 1.1 billion kWh. Tesla will take about 90% of that under a long-term power purchase agreement (PPA). That figure is a share of the plant's generation; it does not mean the project will cover 90% of Tesla's total electricity demand.
| Equipment / contract | Announced scale | What the number represents |
|---|---|---|
| Solar generation | 509 MWp / 450 MWac | Nominal panel capacity / AC-side capacity |
| Battery storage | 360 MW / 1.4 GWh | Discharge output / amount of energy that can be stored |
| Whole plant | More than 1.1 TWh a year | Expected annual generation once operating |
| Tesla contract | About 90% of annual output | Purchase of about 1 TWh a year, on the order of 1 billion kWh |
MW indicates the capacity to deliver power, while MWh and GWh indicate the amount of energy stored or used over a period of time. The solar figures of 509 MWp and 450 MWac describe different sides of the same equipment, so they should not be added together. The battery also simply releases electricity generated earlier, so its output cannot be added to the solar capacity to imply the plant constantly generates that combined total.
In the July 28 contract announcement, the company put supply to Tesla at about 1 TWh a year and described the deal as bundling electricity with renewable energy certificates (RECs). RECs are certificates that represent the environmental value of power coming from renewable sources. The October announcement describes the contracted volume as "more than 1 TWh." Both announcements point to a long-term purchase on the order of 1 billion kWh.
ContourGlobal acquired Sterling, then in development, in December 2024. Off-site work, including procurement of major equipment, began in 2025, and the latest ceremony marks the point at which on-site work moves forward. The project has progressed from a plan with a buyer lined up to the stage of installing equipment.
Construction is expected to employ an average of about 400 people, and a road of about 8.4 km leading to the site from Route 66 will also be built. On the financing side, the company says it has secured bridge financing from an international group of banks to cover part of the equity contribution during construction. This loan is separate from project-level financing at the asset level, which means arrangements for construction funding are moving in parallel with the long-term sales contract.
How a 4-hour battery supports up to 16 hours
Sterling's battery is specified as a "4-hour" system. ContourGlobal CEO Antonio Cammisecra, meanwhile, explained that a design tailored to customer requirements allows the plant to supply power for up to 16 hours a day. The two durations measure different things.
Dividing the announced 1.4 GWh by the battery's 360 MW output gives about 3.9 hours, consistent with the "4 hours" the company cites. The calculation converts the capacity in the October groundbreaking announcement to 1,400 MWh and divides by 360 MW. According to the project page, "4 hours" refers to a design that can discharge at rated output for roughly four hours.
However, the announced capacity is a rounded figure, and this calculation is not a measurement of continuous supply time that accounts for charge and discharge losses or actual operating conditions. Nor does it mean the battery alone can discharge at 360 MW for 16 hours. The 16 hours is the upper limit the company cites for the plant as a whole, combining daytime solar generation with stored electricity.
Storing part of the electricity produced during the day allows supply to continue when solar output falls. The aim of co-locating a battery is to separate the time electricity is generated from the time it is sold, something that simply adding more solar panels cannot achieve.
Of course, the description of "up to 16 hours" should not be read as a guarantee of the same output every day, or of supply 24 hours a day, 365 days a year. How much can actually be supplied at which times depends on sunlight, the battery's state of charge and operating conditions. With the project still under construction, the 16 hours should be kept separate from performance after operations begin.
Arizona sunshine for California demand
Sterling will connect to the grid of the Western Area Power Administration (WAPA) and has secured rights to transmit power to California's electricity market, CAISO. What ContourGlobal outlined in July is a design with firm point-to-point transmission rights. Even though the plant is in Arizona, it will supply power through interstate grids and markets.
The battery's role is easier to understand alongside the needs of the destination. CAISO's own explanation of its grid says that as solar grows, the demand that must be met by other sources shrinks during the day, while demand remains high after sunset, making supply and demand harder to balance. Batteries that discharge midday solar power in the evening and afterward are useful in that situation.
Laying Sterling's design over this pattern of supply and demand reveals a significance that the 450 MW solar capacity alone does not show. The battery shifts the timing of supply, and the transmission rights secure a route to the California market. The idea is to combine generation volume, supply hours and destination to make a source of power that customers can use more easily.
However, having access to CAISO is a separate matter from supplying a specific Tesla factory or AI computing facility directly. ContourGlobal's announcements do not identify where within Tesla the power will be consumed, and there is nothing to suggest it will be sent to a particular site over a dedicated line. Because the contract price and term have not been disclosed, any assessment of how much Tesla's electricity costs will fall is on hold.
Looking ahead to commercial operation in 2028, the questions will be the construction schedule and how much output the plant can maintain after sunset. If the battery and transmission route operate as designed, Sterling would turn Arizona's abundant sunshine into power that can also serve demand after the sun goes down.