Israeli independent power producer Kenlov Renewable Energy has signed a breakthrough utility-scale power purchase agreement (PPA) in the US solar market via a 235MW deal with CPS Energy, the nation’s largest municipal utility based in San Antonio.

The 20-year deal covers about 60% of nameplate capacity on a direct current basis of the future 396MW Tierra Bonita PV project in Pecos County in west Texas.

“This PPA is the cornerstone of Kenlov’s activities in the US and kicks off the development of Tierra Bonita – the first of our six projects in various stages of development, with a total capacity of approximately 1.5GW,” said Yossi Gvura, CEO of Kenlov.

Kenlov and joint venture (JV) partner Ashtrom, an Israeli construction company – both are based in Tel Aviv – have secured the necessary land under a lease arrangement and grid connection approval.

Tierra Bonita is scheduled to enter construction in second quarter 2023, with start of commercial operation at the end of 2024.

The remaining 165MW nameplate capacity its renewable energy certificates will be sold on a merchant basis in ERCOT, the main Texas market with 90% of its electric load.

The pipeline of PV projects in the US includes Tierra Bonita, the largest, with three others in Texas and another with 196MW planned capacity in Idaho. The expected development cost is $1.5bn, according to the JV.

Texas is the largest state power market in the US and leading state for large-scale solar development. While better known for oil and natural gas, renewables growth in Texas is surging due to strong corporate and residential demand, competitive pricing, and a pro-business policy environment that makes it easier to develop and permit large projects.

On 1 January, Texas had 8.5GW of utility solar installed, second to California with 15GW, according to the American Clean Power Association, a national trade group. On 30 June, Texas led all states with 14.2GW of utility solar in development versus number two California with 7.7GW.