Foss & Company closes $58 million tax equity deal for GridStor's 150 MW Gunnar BESS in Texas

On 7 October 2026, Foss & Company announced the closing of a $58 million partnership flip transaction to finance GridStor's Gunnar Reliability Project, a 150 MW / 300 MWh battery energy storage facility in Hidalgo County, Texas^[1]. The project is on schedule to be placed in service in October 2026^[1].

How the deal is structured

The transaction is structured as a partnership flip, a common tax equity vehicle in which the investor holds a majority economic interest until specified return thresholds are met, after which ownership flips back toward the developer. The deal generates Section 48 Investment Tax Credits, the standalone-storage credit expanded under the 2022 Inflation Reduction Act^[1].

The Foss equity closes out a capital stack that was already largely in place:

• $120 million in construction and bridge debt, provided by NORD/LB and Siemens Financial Services, closed in March 2026
• $58 million in tax equity from Foss & Company, closed 7 October 2026
• A tolling agreement with an undisclosed Fortune 500 company, signed December 2025, providing contracted revenue

The debt package from NORD/LB and Siemens Financial Services included construction loans, a tax equity bridge, and letters of credit; the Siemens leg was that lender's first collaboration with GridStor.

Second deal in the Foss-GridStor relationship

This is the second transaction between the two firms. In November 2025, Foss & Company completed an $86 million direct transfer of investment tax credits for GridStor's 220 MW / 440 MWh Hidden Lakes Reliability Project in Galveston County, which entered service on 4 November 2025. That deal was structured as a tax credit transfer rather than a partnership flip.

The shift in structure between the two deals - from a direct ITC transfer to a partnership flip - reflects the range of tax equity mechanisms now available to standalone BESS developers under the IRA.

Foss & Company was founded in 1983 and has allocated over $11 billion in tax equity across historic rehabilitation, renewable energy, and advanced energy production. The firm moved into standalone BESS shortly after the IRA passed, with Bryen Alperin, managing director, previously noting the firm typically targets transactions in the $20 million-and-above tax credit range.

Why Hidalgo County

The Gunnar project sits in the Lower Rio Grande Valley, a corner of the ERCOT system that has historically faced reliability constraints. Once operational, the facility is sized to supply power equivalent to 95,000 average Texas households during peak demand hours.

ERCOT is under significant load pressure. The grid operator forecasts a more than 50% increase in Texas peak load by 2030, driven by industrial growth and data centre expansion. Over 12,000 MW of battery storage has already been deployed on the ERCOT system, but the pipeline continues to grow.

GridStor, founded in 2022 and backed by Goldman Sachs Asset Management, currently manages 530 MW / 1,300 MWh of battery storage in operation and construction, with a pipeline of more than 3 GW in later-stage development across the western and central United States. Gunnar is its second Texas project.

What to watch

GridStor and Foss & Company both signalled intent to expand their collaboration. Spencer Mash, SVP of Finance at GridStor, described the deal as reflecting "the continued maturation of the sector and the growing confidence of financing partners." The immediate question is whether Gunnar achieves its October commissioning date - and whether the partnership flip structure, rather than a direct ITC transfer, becomes the preferred vehicle for the pair's next transaction.