Tribal energy projects have historically been difficult to develop as a variety of legal, institutional, and economic factors conspired to erect barriers to project financing. Congress has recently aimed to change this, with a variety of provisions in the Infrastructure Investment and Jobs Act (IIJA) and the Inflation Reduction Act (IRA) providing for hundreds of millions of dollars in funding available to Tribal governments and communities through loans and grants. However, while more financing options now exist, it can be difficult to navigate the many different programs and their unique processes and requirements.
The funding comes from several different government agencies—including the Department of Energy (DOE), Rural Utilities Service (RUS), Bureau of Indian Affairs (BIA), and the Environmental Protection Agency (EPA)—and each program has its own application process, timeline, and eligibility requirements. The primary funding opportunities from DOE come from loans and loan guarantees through the agency’s Loan Programs Office (LPO). LPO is authorized to provide $20 billion in direct loans or loan guarantees for Tribal investment in energy development projects—including generation, distribution, or transmission facilities—through the Tribal Energy Loan Guarantee Program (TELGP). Though not specifically targeting Tribes, several other DOE programs are also available for Tribes. For instance, the Energy Infrastructure Reinvestment Financing program provides loan guarantees for projects that retool, repower, repurpose, or replace existing energy infrastructure, while the High-Efficiency Electric Home Rebate Program provides grants to Tribal entities to develop and implement a high-efficiency electric home rebate program. Finally, the Energy Improvement in Rural or Remote Areas (ERA) program provides grants to projects that lower energy costs or facilitate clean energy or energy self-reliance in rural areas.
Turning to other agencies, the BIA-administered Tribal Electrification Program is authorized to provide up to $150 million in total grants to assist Tribes with increasing the number of homes using zero-emission electricity, either through the electrification of new homes or transitioning already electrified homes. Next, RUS runs the Powering Affordable Clean Energy (PACE) program (not to be confused with “Property Assessed Clean Energy” programs), with authority to provide up to $1 billion in partially forgivable loans to Tribal utilities (among others) to help finance renewable energy projects. RUS also administers the Empowering Rural America (New ERA) program, which is authorized to provide nearly $10 billion in loans and grants to rural electric cooperatives for financing new energy infrastructure. Finally, EPA administers the Solar for All Program, which provides up to 60 grants totaling $7 billion for Tribal governments and others to expand opportunities for residential and community solar.
In addition to loan and grant programs, select investment tax credits (ITCs) and production tax credits (PTCs) can now be paid to Tribal governments and non-profit entities through the elective pay mechanism included in the IRA. These credits, available for a wide variety renewable energy projects, can provide payments of up to 50-70% of the cost of a project if the project is eligible for the additional tax credit “adder” initiatives. The eligibility for tax credits, and the use or transfer of the credits is ever-changing as new guidance is issued.
The above programs are just some of the many funding opportunities now available for Tribal energy development. Some of them apply to Tribal governments directly, while others extend to individual Tribal citizens or entities serving Tribal communities. Each program has its own eligibility requirements and application procedures, often including multi-part application periods with specific timelines.
One year after the passage of the IRA, many of these programs are now accepting applications and deadlines are fast approaching. To help determine eligibility and navigate the application process for any of the funding opportunities, please contact Keith Gordon, Peter Scanlon, or Gelane Diamond.
More guidance on IRA funding for Tribes can be found here.
