Originally published in the Jackson Hole News and Guide on August 24, 2024
By Sophie Rockefeller, JHCGA Clean Energy Analyst, and Nathan Wendt, JHCGA President
Two years ago, Congress passed the Inflation Reduction Act. In its wake, Wyoming’s communities are forging a new energy future and turning potential into results. This momentum stems from the economic opportunity that clean energy promises through the Investing in America Agenda, which groups together groundbreaking legislation like the Bipartisan Infrastructure Law and Inflation Reduction Act (IRA). The financial incentives in these laws, coupled with Governor Gordon’s leadership, have proven to be a powerful combination.
According to RMI, a research group based in neighboring Colorado, Wyoming has the potential to reap more than $7 billion from the IRA’s climate-related provisions. The Gordon Administration is leaning in. Governor Gordon used his role as Chairman of the Western Governors Association to set a vision for “Decarbonizing the West”. He worked with the Biden Administration to set up the Nation’s first Rapid Response Team of the Interagency Working Group for Energy Communities. He created the Energy Matching Fund to help attract clean energy companies to set up shop in Wyoming. And the recently launched Grants Management Office is a tool for Wyoming communities to identify, apply for, and implement projects backed by federal funds.
For all these reasons, Wyoming clean energy opportunities look to be a terrific opportunity for investors in Jackson Hole and beyond. The Jackson Hole Center for Global Affairs created the Jackson Hole Investor Group (JHIG) to meet the moment. JHIG connects Jackson Hole’s investor community with Wyoming’s clean energy potential, towards the goal of helping provide matching capital to get projects off the ground. We have developed tools such as the Wyoming Clean Energy Map to profile key projects planned and underway as well as workforce training initiatives across the state. Along the way, we are building bridges and partnerships with energy communities and tribal nations to ensure their participation and benefit.
Like many rural areas, the Eastern Shoshone and Northern Arapaho tribes on the Wind River Reservation face challenges such as high electricity costs and insufficient energy infrastructure. On average, tribal households spend more than double their neighbors on energy. A recent report published by the Department of Energy indicates that nearly 14 percent of tribal homes lack electricity nationwide, 10 times the national average.
Last month, alongside representatives from the Eastern Shoshone Housing Authority (ESHA) and Northern Arapaho Tribal Housing (NATH), we held a Wind River Clean Energy Workshop to bring together a cross section of federal partners, tribal leadership, and investors. ESHA has mobilized funds from the DOI’s Tribal Electrification Program to kick-start the Energize Wind River Project, a residential solar microgrid for low-income households. The grant will employ local residents to build two mini-grid solar systems, prioritizing households with the greatest needs (un-electrified, low-income, high occupancy, age and/or disability). At the Workshop, we celebrated the project’s successes and discussed challenges, including the need for workforce training and long-term planning for the Wind River Reservation. After the roundtable discussion, participants toured construction projects underway. It was an honor for us to be invited to participate.
Tribal leaders identified collaboration, workforce development, capacity building, private investment, and philanthropy as priority areas for partnership. They also highlighted the potential for solar projects to ameliorate high electricity bills and create good-paying jobs on the Reservation. The IRA can make a difference here: the Clean Energy Investment Tax Credit (ITC) provides up to 30% credit on the capital investment, significantly reducing upfront costs. Tribal nations also qualify for direct pay, allowing them to claim the ITC as a cash payment instead of a tax credit.
Additional incentives are available if projects meet domestic content requirements, and even more if they are sited on tribal lands or service low-income residents.
These tax incentives, individually and cumulatively, save project developers serious money that can be passed down to residents of the Reservation. To illustrate this, the Yale Center for Business and the Environment (CBEY) created a model for tribal clean energy financing that leverages IRA credits with impact investment. CBEY’s analysis shows how a typical 150 kWh solar farm on tribal land costing $500,000 can use IRA rebates to generate revenue for the tribe. In this real-world example, a $300,000 DOE grant brings the project’s sticker price down to $200,000, alleviating risk for potential investors. The project is then eligible for IRA direct payments that cover 50% of the remaining upfront costs, creating $100,000 in positive cash flow that could be used for high-priority community needs like workforce training or educational services. The remaining $100,000 loan principal could be repaid using the revenue generated from solar energy, while the interest earned on the loan could be reinvested by the funder into other socially impactful projects.
The numbers don’t lie. Partnering with and investing in Wind River clean energy projects is not just the right thing to do; it also offers a strong investment proposition for private and institutional investors. As Wyoming charts its energy future, processes that direct clean energy capital to the Reservation is a win-win. The JHIG is excited to work with the Eastern Shoshone and Northern Arapaho tribes and is grateful to be included in their vision of strengthening their community.
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