Tribal Utility-Scale Solar Initiatives Emerge Across Southwest US

Three tribes are advancing the trend:

• In Nevada, the Moapa Band of Paiutes in 2017 blazed the tribal utility-scale solar trail with a 250-MW installation that supplies power directly to the Los Angeles Department of Water and Power (LADWP). The tribe is proceeding now with the development of two new solar farms, one 200MW and the second 300MW, that will provide power to NV Energy, the biggest utility in Nevada.
• In New Mexico, the first tribal utility-scale solar project on record, on Jicarilla Apache land, will send power via the Public Service Company of New Mexico to the City of Albuquerque as part of a larger plan to replace generation that will be lost in the closure of the coal-fired San Juan Generating Station, which has grown so uncompetitive as to be a drain on ratepayers. The Jicarilla project is a sign—like the Nevada projects—of things to come in one other respect: It pairs solar generation (50MW) with a storage component (20MW).
• In Arizona and Utah, the Navajo Tribal Utility Authority has partnered with the Salt River Project in Phoenix on a 55MW solar park that feeds into the regional grid, and the tribal utility has struck a deal with 16 Utah cities to buy electricity from a planned 66MW solar farm on tribal land in San Juan County, Utah.

Utility-scale solar has become more affordable than gas- and coal-fired generation

“All the deals are tied to long-term PPAs that run from 15 to 25 years, and pricing on the most recent ones—ranging from roughly $21-$23 per megawatt-hour (MWh)—shows why utility-scale solar has become so attractive,” the report states.

The report notes, for example, industry details from Lazard’s most recent annual levelized cost of electricity data update, which put the cost of coal-fired generation nationally at $60-$143/MWh and gas-fired generation at $41-$74/MWh. The unsubsidized cost for wind ranged from $29-$56/MWh, with the subsidized cost falling as low as $14/MWh. Lazard estimated the unsubsidized price of utility-scale solar at $36-$44/MWh.

“That estimate now seems behind the times,” the IEEFA report states.

The report notes nonetheless that tribal lands in the Southwest US remain vastly underdeveloped on the utility-scale solar front and that enormous opportunity exists for deals between utility companies, tribal governments, and tax-equity developers.

“Tribal lands of the Southwest U.S. are far and away the largest single repository of utility-scale solar potential, but development of these resources has moved at an almost-glacial pace,” the report states.

“Indications are that a paradigm shift is at work, however, as tribal interests begin to partner with developers that bring tax-advantage incentives to the table and with utility companies driven by the low cost of utility-scale solar; state mandates also in some instances are helping propel the uptake of renewable energy.”

The Institute for Energy Economics and Financial Analysis (IEEFA) conducts global research and analyses on financial and economic issues related to energy and the environment. The Institute’s mission is to accelerate the transition to a diverse, sustainable and profitable energy economy.