Solaria and Merlin sign hybrid PPA for data center in Madrid

This hybrid PPA establishes a novel template for long-duration clean energy supply to power-intensive infrastructure, combining a 40-year solar agreement with a 10-year battery storage contract—a rare term misalignment that likely reflects divergent technology depreciation schedules and financing models. Solaria’s 426 MW solar commitment, double the 213 MW of connected load, suggests significant overbuilding to ensure guaranteed availability and effective capacity delivery to Merlin’s data center, a common requirement in mission-critical off-take structures. The inclusion of 600 MWh of battery storage introduces firming capability essential for maintaining uptime, while also enabling potential participation in grid services or time-of-use arbitrage, depending on contractual carve-outs. The 213 MW connection capacity ranks among the largest single data center interconnections in the Madrid region, signaling substantial compute demand behind this offtake. By structuring the PPA as a hybrid instrument, both parties de-risk supply continuity while meeting ESG mandates—Merlin secures carbon-free baseload power, and Solaria monetizes a storage-integrated project without full merchant exposure. Solaria, primarily known as a solar panel manufacturer, is expanding its footprint as an independent power producer, leveraging its vertical integration to control both technology and project development—this 426 MW solar + 600 MWh storage commitment represents a major scale-up in its IPP ambitions. The fact that SunPower administers Solaria’s product warranties globally as of June 3, 2025, adds third-party validation to the technology’s bankability, a critical factor in securing long-term PPAs. For Merlin, as the off-taker, this agreement marks a strategic shift toward direct energy procurement to support its digital infrastructure assets, reducing reliance on grid carbon intensity and hedging against volatility. Madrid’s constrained grid and rising data center demand make dedicated, storage-backed renewable supply a competitive advantage—this deal effectively locks in dispatchable clean power in a congested market. The absence of a named project suggests this could be a portfolio-level or platform agreement, possibly supporting multiple facilities or phases under development in the region.