Dear Green Energy Leaders,
Sweeping federal programs are lighting the way for Indian tribes to harness the sun’s power, turning tribal lands into renewable energy hubs.
A massive opportunity is emerging under the Inflation Reduction Act (IRA) and related federal initiatives, offering Indian tribes preferential treatment, forgivable loans, grants, and lucrative tax credits to develop solar energy projects.
The future is green, and Indian tribes are uniquely positioned to benefit from this solar revolution.
Unlocking Solar Sovereignty
At the heart of this opportunity is the ability of tribes to generate solar electricity on their lands and sell it preferentially to federal agencies.
The U.S. government, now mandated to prioritize purchasing renewable energy from Indian tribes, offers a win-win scenario where tribes receive funding to build solar farms and, in turn, secure the federal government as their number one customer.
The Energy Policy Act of 2005 paved the way for this by mandating that federal agencies source a portion of their electricity from renewable sources, granting double energy credits for projects on tribal lands
Thanks to the IRA, this paradigm has expanded dramatically, with tribes now able to leverage programs like the Powering Affordable Clean Energy (PACE) initiative, which offers a 60% forgivable loan for solar projects
This financial liftoff allows tribes to enter the solar energy market with significant capital, while new rules mean the government is essentially locked into purchasing the electricity generated by these projects
The message is clear: solar sovereignty is not just a possibility but an imminent reality for tribes willing to take the leap.
Mega Solar Projects on the Horizon
Several tribes have already capitalized on these opportunities in big ways. The Eastern Band of Cherokee Indians (EBCI) in North Carolina, for example, saved $99,000 per year through solar installations powering their casino and essential community buildings.
Similarly, the Shakopee Mdewakanton Sioux Community in Minnesota is leading the charge with microgrid projects funded by $45.2 million from the Department of Energy
These projects not only enhance energy independence but provide a steady stream of revenue from electricity sales.
In Arizona, the Navajo Nation is tapping into the IRA’s resources to address severe energy shortages, where up to 20% of homes lack access to electricity
Through federal grants and technical support, solar farms are now powering homes and critical infrastructure, turning the tide in these underserved communities.
Financial Windfalls: Tax Credits, Loans, and Grants
Tribes are also able to maximize profits from solar energy projects through an array of tax credits and incentives, including the Investment Tax Credit (ITC) and Production Tax Credit (PTC). These credits can be stacked to cover up to 70% to 100% of a project’s cost if certain conditions are met.
This allows tribes to not only recover their initial investment but to generate long-term revenue from electricity sales.
Moreover, the USDA Loan Program and the Department of Energy’s Renewable Energy Program offer loans up to $100 million for larger-scale projects
The U.S. government’s “direct pay” provision ensures tribes can receive cash payments directly from the IRS, bypassing the need for tax liability—a huge boon for tax-exempt tribal entities.
A Competitive Edge: Preferential Treatment for Federal Contracts
The IRA isn’t just about tax credits and loans; it also grants tribes significant advantages when bidding for federal contracts.
The federal government is legally required to prioritize businesses owned and controlled by Indian tribes, creating a unique environment where tribes can enter into energy supply agreements with guaranteed buyers—federal agencies.
This preferential treatment gives tribes a competitive edge, ensuring they have a significant role in the federal push toward renewable energy.
How Much is on the Table?
The financial potential here is staggering.
In addition to the $366 million recently earmarked for renewable energy projects across tribal lands, the federal government is making billions more available through grants, loans, and tax incentives.
Tribes can now partner with third-party developers, forming joint ventures that enhance access to capital and technical expertise.
Programs like the Greenhouse Gas Reduction Fund, with its $7 billion allocation, specifically target low-income communities, including Indian reservations, providing funding for residential solar and storage solutions.
The Road Ahead: Seize the Moment
The solar gold rush is here, and tribes across the nation are stepping into the sunlight. Whether through massive solar farms powering casinos or microgrid projects stabilizing energy in remote communities, Indian tribes are emerging as pivotal players in the renewable energy sector.
With preferential treatment for federal energy contracts, forgivable loans, and the ability to sell tax credits, the economic rewards are substantial. The path forward is clear: tribes have the power to not only generate clean energy but to claim their place as leaders in America’s renewable energy future.
REAP (Rural Energy for America Program) Overview
Program Objective
REAP offers guaranteed loan financing and grant funding to agricultural producers,
rural small for-profit businesses, co-ops, and tribal businesses.
The program aims to support purchasing or installing renewable energy systems
(RES) and energy efficiency improvements (EEI) projects.
Grant Funding Highlights
REAP grants cover up to 25% or 50% of eligible project costs.
Grant awards range from $1,500 to $500,000 for EEI projects and $2,500 to
$1,000,000 for RES projects.
Loan Guarantees
REAP-guaranteed loans are provided through lending institutions.
These loans can finance up to 75% of a project’s total eligible costs with an 80%
guarantee.
Eligibility & Program Information
Agricultural Producers and Rural Small Businesses
Renewable energy systems (RES) and energy efficiency improvements (EEI) projects
Important Considerations
Do not incur project expenses until you have received a complete application letter
or grant award.
Applications are accepted year-round; however, only complete applications with
environmental reviews compete in funding cycles.
Upcoming Funding Cycles for Grants
September 30, 2024
Steps to Apply for REAP Funding
Contact Project SunRize and consult with one of our executive team members to
develop your project design, determine costs, and ensure eligibility and
competitiveness within the REAP program.
IRA and Energy Communities
What is the Inflation Reduction Act (IRA)
The Inflation Reduction Act (IRA) of 2022 and the Infrastructure Investment and Jobs Act of
2021 include numerous programs and investments to support energy communities
or communities that have historically relied on fossil fuel extraction and production to power
their local economies.
What is a smart energy community?
A Smart Energy Community seamlessly integrates local, renewable, and conventional
energy sources to efficiently, cleanly, and affordably meet its energy needs. It is a coveted,
highly livable place to live, work, learn, and play.
What is the concept of community energy?
Community energy refers to the delivery of community-led renewable energy, energy
demand reduction, and energy supply projects, whether wholly owned and/or controlled by
communities or through a partnership with commercial or public sector partners.
Power Purchase Agreement (PPA)
A solar power purchase agreement (PPA) is a financial contract between a customer and a
third-party developer where the developer installs solar panels on the customer’s property,
and the customer buys the power generated by the panels. The customer, also known as
the off-taker, usually agrees to a long-term contract, often 10–25 years or more, to
purchase the electricity at a fixed rate. The rate is typically lower than the customer’s local
utility’s rate, which helps offset the customer’s electricity costs from the grid. The
developer, on the other hand, keeps ownership of the system and is responsible for
installation, maintenance, and any tax credits and incentives.
Here are some things to consider about solar PPAs:
Property
The customer’s property can be owned or leased, but solar financing works best for leased
properties if the customer has a long-term lease.
Cost
PPAs can help customers avoid high upfront costs by “renting” solar panels.
Taxes
Solar systems can increase the value of a property, which may lead to higher property
taxes. Some states may exempt green upgrades from this increase.
