Q&A - Matrix Renewables: Tariff impacts and blackouts in Spain

While global markets may be reeling from the various decisions made by US President Donald Trump, the US renewables sector may be one of the worst affected.  

Last month [April 2025], the US Department of Commerce announced plans to set tariffs of up to 3,521% on solar panels produced in Cambodia, Thailand, Malaysia and Vietnam. In an unprecedented blow to a large-scale renewables project, Mr Trump also ordered Equinor to halt construction works on its Empire Wind 1 offshore wind project, putting the $3 billion debt package for the project at risk. 

Despite these uncertainties, Matrix Renewables is still confident in the US market. The platform, backed by global alternative asset manager TPG and its $27 billion (£20.5bn €24.3bn) impact-investing platform TPG Rise, is navigating its investments in the country and is confident in the returns on its solar projects in the US.  

inspiratia sat down with Luis Sabaté, chief executive officer at Matrix Renewables, to discuss how the platform has mitigated some of the impacts of the new policies on solar projects.

Matrix is active across multiple technologies and markets, but broadly, what is keeping you busy these days?

In terms of markets, we are very active in the US and Europe. When we say Europe, we are in Spain and Italy, and recently we have announced that we are entering into the UK market. We are also active in Chile, with a portfolio of 350MW of PMGD regime projects. Most of our current and future investments are going to be in these four countries: The US, Spain, Italy, and the UK. 

In the US, we have 422MW of operational projects and are finishing construction on another 280MW project in the ERCOT market. We have recently started construction on another 457MW project in ERCOT, which will get to financial close pretty soon. 

Overall, by the end of the year, we expect to have around 1GW of projects either under operation, under construction, or ready to build in Spain and Italy. 

In Scotland, we are finishing the development of two 500MW/1GWh battery storage projects and expect to start construction on the first of those projects by the end of the year. 

As a developer quite active in the US, what impact could the tariffs and the looming global trade war have on the renewables space?

Well, that is a tricky question, because not even the Trump administration knows what the impact is going to be. That is the reality. The impact is uncertain because they keep changing numbers and priorities, as well as using these tariffs as a negotiation tool towards the entire globe. We have assessed the impact of the current and latest tariff news, and obviously, all of our projects have suffered a certain impact.

The good news is that since the inception of Matrix, we have set up the US business operations and tried to ensure as much domestic supply as possible. We knew it was important and have started doing that since the very beginning. 

We have good contracts for domestic thin film solar modules with First Solar and with Nextracker, a US-based provider of solar tracker solutions, along with high-voltage equipment suppliers. 

These mitigate a lot of the impacts for our US solar projects. There is some impact, but given we still have very good, healthy returns, we are going to keep pushing on solar projects. 

For battery storage, the situation is a bit different because the current tariff uncertainty is making us more prudent. 

There are not many domestic suppliers or supply chains in the US for battery storage yet. This creates additional tension that is making us more prudent in those BESS investments nowadays. 

Have recent developments like Equinor's spat with the Trump administration over cancelled permits weighed on your mind?

No. Frankly speaking, we believe that our current portfolio of projects is going to move forward. But as a precaution, we are safe harboring all of our projects. Basically, this means that we are trying to invest enough money and make enough progress on the projects to have the current tax code applicable to our projects when we finish the construction in the next four years. 

That is something that we have launched, and we were proud to report to our board that we are going to be in a very safe position. The projects' value that we have for the next four years is going to be protected by these safe harboring rules. 

What is the rationale behind your recent expansion into the UK BESS market?

The UK is currently one of the most attractive markets for investment in Europe for both renewables and flexible generation. The government has implemented measures to encourage investments in the sector, to align with its decarbonisation targets. Also, we have seen a steady increase in electricity demand, driven by the digital economy, AI, domestic heating, and EVs. 

In terms of the storage sector, the UK has one of the most advanced regulatory frameworks in Europe. It offers diverse revenue streams, and the combination of the contracted stack and merchant portion gives a very nice outlook. 

When we think about what happened in Spain last week, these storage systems can play a key role in alleviating the grid congestion and create more value for the market by reducing the price difference between day and night hours. Our projects are strategically situated on the border between Scotland and England. All the renewables generated in the north will go through to the consumers in England. 

Speaking of which, there have been countless theories floating around surrounding the recent blackouts in Spain. What, in your opinion, is the most likely cause?

We still must be prudent because we do not know what caused the trigger event that created this domino effect affecting the entire grid. What is clear is that there was some grid disturbance that caused a lot of electricity generation to be tripped. 

I do not think that any technology is to blame here. On the contrary, we know of other jurisdictions where they have even more renewables penetration without having these issues. Just compare our market with CAISO and the Australian markets, where they have even more renewables penetration. 

In Spain, we need to focus on adding more protections to the grid itself and adding more battery storage. We have the technology, but have not yet taken advantage of it in Spain. By investing in storage combined with the power electronics technology installed in our plants, we can create a more robust grid that will be more solid for the future. 

Spain's BESS market so far has struggled to take off. What are the factors behind that?

There are two principal factors. As of today, there is no clarity on the regulations around building hybrid or co-located storage plants in Spain. There are certain grey areas that the government is currently solving. That is the main factor for us. As soon as that is clarified, we can progress our projects in Spain. We currently have projects that are ready to invest in. These standalone and hybridised BESS projects will come into play as soon as the regulation is stabilised. 

The upcoming capacity market auctions in Spain can also develop the sector. We are ready, we have the technology, and we have the investors behind us. 

Going back to the UK, you are entering at a time when the market is awaiting changes surrounding grid reform and the possibility of zonal pricing. How have you factored that in?

We looked into this when we invested in these two initial projects. It is believed that grid reforms will be in place by September, which is great news. 

Additionally, we have picked two projects that are perhaps the best projects when it comes to grid connection location. We are certain that these will be one of the first projects to be built and connected to the grid following the reform. 

On the second point, we are accustomed to zonal pricing. That is how most markets operate. That is nothing new for a company like Matrix Renewables. Because of zonal pricing, developers will need to pick the right location, and that's exactly what we did with the first two projects. 

For our future developments, we want to add an additional 2GW on top of the 1GW portfolio we currently have. These are the key factors in picking projects we want to invest in. 

Where do you see the solar market in Spain going over the next few years?

The solar market is certainly going through a challenging period in Spain. We see a lot of developers aiming to sell their projects, and the price for solar in Spain has gone down dramatically. 

But over the long term, solar still makes sense. The market still offers attractive opportunities in light of growing demand. 2024 was the first year where there was a 2% increase in demand year on year. We are seeing a greater demand for electricity driven by the same factors I mentioned earlier - AI, data centres, domestic heating and EVs. 

We believe we have a good fleet of projects in our pipeline. We have about 800MW of solar plants that we could potentially hybridise with battery storage and potentially even with wind collocated plants. We plan to hybridise those plants, which would not only make the power we produce more stable but also support the grid. 

We see colocation and battery storage as the next big opportunity in Spain. If you only have standalone PV plants, those projects are going to suffer. 

Matrix is also exploring the development of hydrogen projects. What is the rationale behind that?

Matrix Renewables has created a separate branch called Hyren, which is fully dedicated to developing green hydrogen and other products like ammonia, methanol, etc. We truly believe this going to be something very interesting for the future. However, it is not a reality yet. 

We have done something different with Hyren versus conventional developers. We understand that green hydrogen depends on the offtake. If you do not have a good offtaker, then you are essentially building a project in the middle of nowhere, believing in the potential of a future European hydrogen pipeline, which could happen, but only in the long term. 

But as long as you have a location close to the current hydrogen consumers, that is when you may have a successful project. Most of our portfolio of projects are close to current consumers of hydrogen. They are big consumers, but you need to provide them with cheap green hydrogen as well. 

To enable that, all of our projects must have co-located renewables. We do not want to rely on the grid virtual PPAs to generate the green hydrogen. All of our projects have at least solar PV, and others have co-located solar with BESS and wind. 

We need to create a small ecosystem around the green hydrogen plant so you can produce green hydrogen at a low cost. That is the way we approach things. We have 1.6GW of those kinds of projects in Spain. 

Are there any other markets that you are looking to expand into?

We are consciously exploring Germany as a potential new market for us. But other than that, we will not go to other markets. We select markets based on being OECD tier 1 countries and having strong currencies like euros, dollars, and GBPs. 

We look at markets where there are financial parties that come along with us – people that we can rely on to finance our projects as well. Lastly, we are focused on countries where there are large corporates as offtakers, of either power or hydrogen. 

For Germany, it will be focused on solar, wind, and storage. I do not think we will go for hydrogen in Germany. Hydrogen is going to be limited to the US and Spain.