JPMorgan provides $680 million in funding to Orsted for US solar and battery projects.

• On Thursday, JPMorgan invested $680 million in two of Orsted's energy projects, including the Eleven Mile Solar project near Coolidge, Arizona.
• The solar farm at Eleven Mile Solar boasts over 857,000 solar panels and 2,000 battery cubes, enabling it to provide power to approximately 65,000 homes.
• A new Meta Platforms data center in Mesa, Arizona will receive the majority of the power generated at Eleven Mile Solar.
• The Inflation Reduction Act has stimulated clean energy investment in the U.S. by increasing existing tax credits and introducing new incentives, including the option to sell tax credits on the open market.

The Biden Administration's signature climate law, the Inflation Reduction Act (IRA), has spurred a clean energy boom in the U.S., with Danish renewable energy developer Orsted winning a $680 million investment from the IRA for two U.S. projects.

JPMorgan will finance Orsted's 600-megawatt Eleven Mile Solar Center and 250-megawatt Sparta Solar projects with tax equity financing.

Renewable energy projects have long relied on tax equity partnerships with large financial institutions. In these partnerships, the institutions provide part of the financing for the project in exchange for the project's tax credits. Since developers often do not have high enough tax bills to monetize their credits, partnerships allow them to do so.

The tax equity market was between $18 billion and $20 billion per year prior to the IRA, according to the American Council on Renewable Energy. However, Evercore ISI noted that this is still far short of what is needed in the post-IRA clean energy investment landscape. The bank estimates the potential market for tax credit transfers to hit $47 billion in 2024 and more than $100 billion annually by 2030.

"For the first time, we've been able to do something like this, which opens the doors for many more corporations and companies with tax liability in the United States to support clean energy projects," said Melissa Peterson, head of onshore and origination at Orsted, in an interview with CNBC. "This unique structure is something we hope to replicate multiple times."

The construction of the $1 billion Eleven Mile Solar site began in January 2023 and will be able to power approximately 65,000 homes once operational later this year. Two-thirds of the power generated will be used for a new data center under construction nearby. Orsted is selling the power to Salt River Project, who will then sell it to Meta.

The Boston Consulting Group predicts that data center electricity consumption will increase by more than three times between 2022 and 2030, necessitating the same amount of power as 40 million households by the end of the decade. This increase in demand is due to both the growth in data center usage and the existing load growth.

"According to Peterson of Orsted, working as a renewable energy developer in the United States has never been better. With the growing demand for reshoring manufacturing, big tech companies, and the Inflation Reduction Act, there are numerous opportunities for developers. Additionally, many corporations have set ambitious climate targets, creating even more potential for growth."

She added, "This is the greatest opportunity we see."

- CNBC's Harriet Taylor and Van Applegate contributed reporting.