OCI SOLAR Power selling projects pre-construction, entering Texas storage market

San Antonio-based solar developer OCI Solar Power is embarking on what the firm’s VP for Business Development Tim Heinle calls its “diversification year” as it enters the ERCOT storage market and begins selling its pre-development projects at increasingly early stages.

The company’s ownership structure is unique as a subsidiary of Seoul, South Korea-based OCI. The parent company is a green energy and chemical conglomerate that is a leading producer of polysilicon used in the production of solar modules. Mission Solar Energy, a solar module manufacturer that is also based out of San Antonio, is also under the OCI banner. Although this firm has supplied a number of OCI Solar projects with modules, it shifted to a focus on the residential and commercial sectors until the passage of the IRA last year. Since then it has announced a major expansion to its manufacturing plans to get up to 1 GW produced annually next year.

Both OCI Solar and Mission Solar are longtime partners with San Antonio utility CPS Energy; OCI Solar moved to San Antonio from its original home in Atlanta, Georgia in 2012 as part of an economic development agreement with the city. Since then, the firm produced nine projects for the utility including Alamo 1-7 as well as the Pearl and Ivory projects.

While OCI Solar still owns the first two Alamo projects, it has sold the rest of its Texas pipeline to various buyers including Con Edison, Berkshire Hathaway, D.E. Shaw and, most recently, Buckeye Partners and Arava Power. The last two projects, Parker and SunRay, were particularly notable for OCI Solar as its largest projects (both 200 MW) and also because they were the first projects the firm sold pre-construction.

Heinle says thanks to the strong push for renewables in Texas, the firm hasn’t even had to work with financial advisers on its last few transactions including those with Buckeye and Areva.

“A lot of buyers are finding us just through networking,” Heinle said. “Long-term owners are interested in getting involved earlier-and-earlier and don’t mind taking construction risk.”

As such, OCI Solar now only maintains ownership of a handful of projects, most of which are smaller than 5 MW, with a combined capacity of 48 MW. Heinle says this reality contrasts with OCI Solar’s original plan of being an owner/operator when it began developing in Texas, but over time he says the firm shifted to “staying in the developer lane since we aren’t always tax efficient.”

“Right now, we like the evaluations we’re getting for our projects,” Heinle said.

However, he says the firm will maintain its goal of hanging onto some of its projects moving forward, though those decisions will be made on a case-by-case basis.

“Putting up projects for adoption that we work so hard on hurts,” Heinle said.

Although it has experience developing across the state, Heinle says OCI Solar plans to concentrate its upcoming Texas developments in what he calls the Texas “load triangle,” constituting the counties between Dallas/Ft. Worth, San Antonio, and Houston. He says this move will put the projects much closer to load centers and avoid constraints involved with developing in historically rich West Texas.

OCI Solar has already announced a few projects in this area including the 110 MW Three W project in Hill County under contract with Mitsui USA. The firm announced an agreement for multiple projects with Mitsui in February that will involve developing projects and offering them to the asset manager first.

Beyond this pipeline, OCI Solar is also developing the 210 MW Stillhouse Project in Bell County, which Heinle says is under contract with a separate company. OCI Solar plans to finalize this sale in “the next few weeks,” according to Heinle.

Finally, OCI Solar has announced perhaps the most notable project in its pipeline, the 100 MW Bexar Energy Storage project in Bexar County, which will be its first utility-scale storage project. The firm’s entrance into the storage market was informed by the IRA and the ongoing ERCOT storage push in the wake of the state’s aggressive renewable expansion.

Heinle says getting into the storage market is also part of the firm’s diversification strategy and that multiple other unannounced projects are also being sited at this stage. He says the firm is trying to take a strategic approach to siting these projects to differentiate itself in the increasingly crowded market but doesn’t want to give away too much detail.

Casting a shadow on all of these plans, however, is hostile legislation being considered in the Texas legislature that could add additional charges and even limit the amount of renewables that can be developed in the state. Heinle says he is tracking these bills and calls the push for additional natural gas in the name of reliability “ironic,” given the failures of natural gas projects during Winter Storm Uri.

“During Winter Storm Uri, our solar projects performed off the charts and it was the natural gas supply that really contributed to a lot of the outages,” Heinle said. “We should be using batteries to back up renewables, not natural gas.”

Although he says he expects OCI Solar to “always be involved” in solar and storage development in ERCOT, he says bills like these give OCI Solar “all the more reason to diversify.” As such, Heinle says the firm is in the early stages of exploring development outside of Texas.

“We believe renewables are here to stay in ERCOT, but a lot of this legislation is really anti-renewables, which we think is misplaced,” Heinle said. “It does introduce some risk.”

*This story was originally published exclusively for NPM subscribers last month.


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