Houston-based energy solutions firm Solaris Energy Infrastructure has signed a long-term equipment rental deal to supply more than 500MW of power generation capacity to an AI-focused data center customer.

The agreement will see Solaris subsidiary Solaris Power Solutions supply the capacity to Hatchbo, a Delaware-based limited liability company described as an affiliate of an investment-grade global technology company operating in AI computing. DCD has reached out to both companies for further information.

The initial rental term is scheduled to begin on January 1, 2027, and run for ten years. The contract includes an option to extend for a further five years.

Under the terms of the deal, Solaris will provide generation equipment to meet power demand from the data center. In addition, the parties have stated their intention to negotiate a separate Power Purchase Agreement (PPA). The PPA is expected to last at least as long as the rental agreement. If completed, Solaris would own, install, and operate the equipment and associated balance-of-plant infrastructure.

The customer has the option to terminate the rental agreement within 30 days of its signing, provided it is not in default. In that case, it must pay a fee equal to 50 percent of the remaining rental payments on the affected equipment through the end of the term.

As a backstop to the agreement, the customer's parent company has issued a guarantee covering up to 50 percent of total rental fees for the initial term. The guaranteed amount declines each year but remains at least 50 percent of the future payments during that period.

Solaris did not disclose financial terms or the location of the deployment. It said that it will reveal further details on the agreement in its next annual report.

Solaris is predominantly a natural gas power supplier and, over recent years, has increasingly targeted the data center market. The company has developed an integrated power solution for the data center market, offering behind-the-meter natural gas power in increments of 5.7MW, 16.5MW, and 35MW.

Last April, the company extended a power supply agreement with a “major” data center client from 500MW to 900MW, with the capacity expanded to power a data center operated by a joint venture between Solaris and the customer.