ORA Inks Long-Term PPA to Deliver Carbon-Free Geothermal Power

Ormat Technologies, Inc. ORA recently started that it has inked a 20-year Power Purchase Agreement (“PPA”) with Switch. This agreement marks Ormat’s first direct PPA with a data center operator, showcasing Ormat Technologies’ expertise in geothermal energy production and the increasing demand for sustainable energy solutions in the data center industry.

Energy deliveries are set to begin in the first quarter of 2030, following a major upgrade to the Salt Wells power plant, expected to be completed by the second quarter of 2026.

Key Benefits of ORA’s Long-Term PPA

The agreement provides long-term revenue visibility through the sale of 13 megawatts (MW) of carbon-free geothermal power from its Salt Wells plant. As part of the agreement, Ormat also gains upside optionality through the potential addition of a 7 MW solar photovoltaic facility, which could boost overall returns and operating efficiency. 

This agreement strengthens Ormat Technologies’ exposure to the fast-growing data center market, supports margin stability and reinforces the strategic value of its geothermal assets. Importantly, the company sees opportunities to recontract more than 100 MW of its existing fleet and future PPA expansions, supporting long-term growth.

Ormat’s Strong Position in the Geothermal Market

As climate change impacts intensify, the shift toward renewable energy sources such as geothermal power is accelerating to reduce greenhouse gas emissions. Geothermal plants provide continuous, weather-independent electricity, making them a reliable and flexible source of baseload power and a strong support during major grid outages or disruptions.

Per the reports from the Mordor Intelligence firm, the geothermal energy market is likely to register a CAGR of 9.65% during 2025-2030. As a leading player in geothermal power generation, Ormat Technologies is well-positioned to benefit meaningfully from these favorable market growth trends.

In the third quarter of 2025, Ormat Technologies entered into two Geothermal Exploration and Energy Conversion Agreements, a new form of PPA with an Indonesian utility, each supporting up to 20 MW of geothermal capacity. By the end of September 2025, the company’s total capacity reached 1.6 gigawatts, which includes geothermal power plants. Ormat Technologies expects to develop nearly 200 MW of projects by the end of 2027, with 121 MW focused on geothermal energy across nine projects.

Other Stocks to Watch

Other companies that are expected to gain from the expanding geothermal energy market are discussed below:

Baker Hughes Company BKR: The company has more than a decade of experience in geothermal energy. It has developed a prototype metal-to-metal mud motor featuring a mud-lubricated bearing assembly and a titanium transmission, designed to harness energy from an enhanced geothermal system in Iceland.

BKR has a long-term (three to five years) earnings growth rate of 12.27%. The Zacks Consensus Estimate for 2026 sales is pegged at $27.56 billion, which suggests an improvement of 0.6%.

Halliburton Company HAL: The company offers a broad portfolio of products, technologies and integrated services designed to lower costs and mitigate risks across geothermal projects. It collaborates closely with customers to deliver tailored solutions suited to a wide range of geothermal energy projects.

HAL delivered an average earnings surprise of 4% in the last four quarters. The Zacks Consensus Estimate for 2026 sales is pegged at $21.55 billion.

ORA Stock Price Movement

In the past six months, shares of Ormat Technologies have risen 31.2% compared with the industry’s growth of 8.2%.

ORA’s Zacks Rank & A Key Pick

Ormat Technologies currently carries a Zacks Rank #3 (Hold). A better-ranked stock from the same industry is FuelCell Energy, Inc. FCEL, which has a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

FCEL delivered an average earnings surprise of 10.68% in the last four quarters. The Zacks Consensus Estimate for fiscal 2026 sales is pegged at $174.6 million, which suggests an improvement of 10.4%.

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This article originally published on Zacks Investment Research (zacks.com).

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