When the Infrastructure Investment and Jobs Act (IIJA) was enacted in 2021, Congress appropriated $13 billion for direct investment in tribal communities. The Inflation Reduction Act (IRA), enacted the following year, appropriated at least another $720 million for direct investment in tribal communities. This is just the tip of the iceberg, as dozens of federal programs under IIJA and IRA provide additional funding to tribes through grant competitions and other funding mechanisms. In recent months, several federal programs funded under IIJA and IRA have created incredible opportunities for tribal communities that will benefit for decades, but tribal communities need to be able to take advantage of them. In this article, we will cover some of the recent developments regarding tribal funding opportunities in the clean energy sector.
The IRA created two new tax credit delivery mechanisms, estimated to be worth $36 billion over 10 years, that will extend the full value of the IRA energy tax credit to organizations with little or no tax liability. Called “selective payments” or “direct payments,” these new mechanisms allow tax-exempt entities, including tribes, to receive the tax credit benefits in the form of a tax refund. In February, the U.S. Department of Energy (DOE) outlined how the program works for tribes in its Tribal Nations and Native Communities Resource Guide. On March 5, 2024, the U.S. Treasury released a final rule implementing the program. The Treasury is currently working on another rulemaking that will provide further clarity and flexibility to eligible entities that co-own clean energy projects and want to take advantage of direct payments.
On April 4, 2024, the U.S. Environmental Protection Agency (EPA) announced that it would invest $14 billion in IRA funds through the National Clean Investment Fund to support grants to three organizations. These organizations will establish a national clean finance program to provide accessible and affordable financing for clean technology projects. The largest grant was awarded to the Climate United Fund for approximately $7 billion, which will invest in “hard-to-reach market segments, including consumers, small businesses, small farms, community facilities, and schools.” The Climate United Fund has committed to providing at least 60% of its investments to low-income and disadvantaged communities, 20% to rural communities, and 10% to tribal communities, supporting projects such as energy-efficient home retrofits, electrification upgrades, and solar installations. The Coalition for Green Capital received $5 billion, and Power Forward Communities received $2 billion. Both organizations have committed to making the majority of their investments in low-income and disadvantaged communities.
On April 22, 2024, the EPA announced the awarding of $7 billion in grants under the IRA-funded Solar for All program. The program will provide residential solar projects for more than 900,000 homes nationwide. More than $500 million of the funds were awarded to six tribal projects managed by Midwest Tribal Energy Resources Association Inc. (for the benefit of 35 tribes), Three Affiliated Tribes (serving tribes in five states), Tanana Chiefs Conference (for the benefit of tribal residents throughout Alaska), Oweesta Corporation, Hopi Utilities Corporation, and GRID Alternatives. Solar for All grant recipients are tasked with developing long-term solar programs that benefit tribal communities. For example, GRID Alternatives has partnered with Tribal Nations in five states with partners such as the Alliance for Tribal Clean Energy, Native CDFI Network, Native Renewables, and tribal and community colleges to target 50% of installation and development work to be performed by local tribal workers.
Among recent announcements of federal funding for tribal energy priorities, there have been numerous investments through clean energy accelerators. Accelerators are organizations or programs that provide assistance to emerging companies (often including guidance, technical assistance, marketing, capital, and access to investors) to help the companies become self-sustaining and viable. Accelerators can be publicly or privately funded.
In May 2023, the National Science Foundation awarded a grant to the Southern California Tribal Chairs Association to lay the foundation for a Tribal Energy Innovation Accelerator. The accelerator aims to “combine technical and non-technical collaboration to foster the creation of new clean energy equipment products and tribal businesses, more resilient energy production systems, and workforce training services.” Funded under CHIPS and the Science Act, the project is designed to complement other tribal energy activities funded through the IRA.
In Alaska, climate technology deployment accelerator Launch Alaska will leverage a $3.4 million Energyshed grant from the Department of Energy to support at least $10 million in investments in Southeast Alaska and the Northwest Arctic. Launch Alaska’s broader plan is to support $1 billion in clean energy project development by 2030. But many of the beneficiaries of Launch Alaska’s work are remote tribal communities that rely on diesel generators to power their microgrids, including the Alaska Native villages of Kivalina, Shungunak and Kotzebue. With the support of the Energyshed grant, at least three new projects will have committed public and private funding matched.
The Tribal Solar Acceleration Fund, a national tribal energy acceleration organization, provides matching funds to tribes in need of cost-share funds, including outstanding Department of Energy grant matching fund requirements, and leverages IRAs and other funding opportunities. The Fund administers a tribally-led grant program that supports solar projects in tribal communities nationwide and provides tribal solar grant opportunities to tribal communities and tribally-led nonprofit organizations, as well as leadership development programs.
The IRA itself established the Clean Technology Accelerator, an EPA-managed initiative to support distributed energy, net-zero buildings, and zero-emissions transportation projects. Unlike the three accelerators discussed above, the Clean Community Investment Accelerator (CCIA) does not itself invest in or support startups. Instead, CCIA has invested $6 billion through five organizations to “establish a hub that provides capital and technical assistance to community lenders working in low-income and disadvantaged areas, providing an immediate path to develop projects in those communities.” Among the five recipients of CCIA funding is the Native CDFI Network, which received $400 million to provide technical assistance, technical assistance funding, and capital to help 63 community lenders (including 58 Native CDFIs) expand their clean energy lending capacity in Native communities. According to the EPA, each selected agency will provide capital improvement funding (typically up to $10 million per community lender), technical assistance grants (typically up to $1 million per community lender), and technical assistance services to help community lenders provide financial assistance to deploy projects where they are needed most.
Of course, these federally funded projects are just a few examples of the many efforts underway across the country to deploy clean energy infrastructure in tribal communities. For more information about funding opportunities available to support clean energy projects in tribal communities, we encourage you to visit the following DOE website: This website contains information about funding opportunities from DOE and other federal agencies, as well as several non-federal agencies.
