DOE closes $72.8 million loan for solar + storage microgrid on Tribal lands
As part of the Biden-Harris administration’s Investing in America agenda, the U.S. Department of Energy has closed on a $72.8 million loan guarantee to finance the development of a solar + long duration energy storage (LDES) microgrid on Tribal lands in California.
Granted through the DOE’s Loan Programs Office (LPO), the financing will support the construction of a microgrid for the Viejas (Baron Long) Group of Capitan Grande Band of Mission Indians of the Viejas Reservation near Alpine, California.
“When President Biden and Vice President Harris say that every community deserves the opportunity to benefit from our clean energy future, they mean it,” said U.S. Secretary of Energy Jennifer M. Granholm. “Thanks to game-changing new funding from the Investing in America agenda, DOE is making a first-ever announcement through our Tribal Energy Financing Program, reinforcing this administration’s commitment to helping build stronger, more resilient Tribal and Indigenous communities.”
This project — supported by a grant from the California Energy Commission, investments from U.S. Bancorp Impact Finance, a subsidiary of U.S. Bank, and Starbucks — will provide the Viejas Band with reliable utility-scale renewable energy generation and storage infrastructure through the installation of a 15 MW photovoltaic solar generation system and a 70 MWh battery LDESe system. The announcement underscores President Joe Biden’s and Vice President Kamala Harris’ commitment to working with Tribal Nations and communities to build an inclusive, equitable, and resilient clean energy future.
“Amid surging energy demands, the Viejas Microgrid project is a win-win for the Viejas Band of Kumeyaay Indians and California’s clean energy goals,” said U.S. Senator Alex Padilla (D-CA). “California Tribes deserve energy independence and security as they adapt to the climate crisis, and the Inflation Reduction Act is making that priority a reality. This groundbreaking loan guarantee will reduce the Tribe’s energy costs, increase reliability, bolster their economic development, and create over 250 good-paying jobs.”
After solar and battery system installation, the Viejas Band of Kumeyaay Indians will purchase electricity through the project company under a long-term power purchase agreement (PPA) to help operate various commercial businesses including gaming, hospitality and retail facilities. When complete, the project will allow the Tribe to benefit from a lower cost of energy, allowing savings to be redirected toward investments by the Tribe in infrastructure maintenance, operation of the fire department, Tribal culture and educational programs, and other Tribal member services.
“As we continue to face the negative impacts of climate change, Tribal Nations must have the opportunity to address how their energy needs have evolved in order to better serve their communities,” said U.S. Senator Laphonza Butler (D-CA). “This investment from the Department of Energy will make sure that the Viejas Band of the Kumeyaay Indians are equipped with the necessary infrastructure to provide access to affordable and reliable clean energy.”
This project is expected to create 250 construction jobs and eight permanent operations jobs, including prioritizing Tribal, minority and veteran-owned contractors.
The project developer, Indian Energy, is a 100% Native-owned microgrid developer and systems integration firm. Both the project company and the borrower, which is a TEDO, are owned by Indian Energy, Turtle Mountain Band of Chippewa Indians, and the Sault Ste Marie Tribe of Chippewa Indians.
LPO is providing a maximum guarantee of up to $72.8 million, for a U.S. Bancorp Impact Finance loan amount of at least $80.8 million (but up to $100 million) to complete the construction of the microgrid system. Additionally, DOE’s loan guarantee is supported by anchor investments from U.S. Bancorp Impact Finance and Starbucks to construct the solar microgrid providing renewable energy to the Tribal community.
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