Tribal nations seek new financing paths after federal clean energy grants canceled

Tribal nations seeking to build clean energy projects are exploring new financing avenues after the Trump administration cut clean energy grants such as "Solar for All." The "Solar for All" program had originally reserved more than $500 million for solar development on tribal lands.

The Tribal Renewable Energy Coalition, made up of 14 tribes, had previously received more than $135 million in "Solar for All" grants, but those grants have now been canceled. Cody Two Bears, CEO of the coalition, said during a November conference call that the coalition will continue to use the solar project plans it has developed, but will turn to funding sources such as loans and philanthropy.

Two Bears said: "I think that's the positive side we got out of 'Solar for All' — we had over a year to plan, and now we have projects ready for tribes that can start utilizing these funds. I think that's our plan moving forward."

After the Trump administration took office and began canceling grants related to the Inflation Reduction Act, "the large utility-scale projects we were advancing suddenly became difficult to finance," said Chéri Smith, CEO of the Alliance for Tribal Clean Energy. "But opportunities still exist."

Earlier this year, the alliance launched a suite of project financing and planning tools called the "Weaver Platform," and is helping tribes "use the tool to structure their capital stack" while "engaging with various networks of investors to try to finance projects with private rather than public funds," Smith said.

Smith noted that the Trump administration's grant clawback actions have recovered significant amounts of federal clean energy funding from tribes. She mentioned that the alliance's grant-writing team secured grants totaling $484 million for 46 tribes in 2024.

That was "really exciting," she said, "and the 'Indigenous Power & Light Fund' was supposed to bridge the gap between those funds and the total project costs. However, 85% to 90% of it has been clawed back."

A spokesperson for the U.S. Environmental Protection Agency (EPA) said that this year, the agency's "base budget includes nearly $300 million to support tribes through direct grants, technical assistance, training, and more, all within our statutory authority. The Trump administration's EPA will continue to work with states, tribes, and communities to support projects that advance the agency's core mission of protecting human health and the environment."

Although third-party capital is a strong alternative to federal funding, connecting these investors with tribal nations to finance projects is often not easy, said Clara Pratte, founder of solar company Navajo Power, during a November conference call.

"There is money in the capital markets and a willingness to invest, but that money often comes with many misconceptions or misunderstandings about how tribes operate," she said. "As developers and practitioners, it's our job to help these markets overcome those misconceptions and make them comfortable with investing."

But Pratte said the willingness to invest does exist because vast amounts of land in the Great Plains and further west "are under tribal control and tribal jurisdiction. So if these markets don't figure out how to develop on these lands, that would be a dereliction of duty. We have to remove the misconceptions and make investment smooth."

"From a developer's perspective, Indian Country is essentially an endless canvas of blank slates," said Todd Halvorsen, director of energy finance and structuring at the Alliance for Tribal Clean Energy. "The credit risks that the financial community perceives are not really the issue. We should be able to gather enough good people, raise the capital needed to build these systems, provide reliable power, and let the projects generate cash flow."

The Alliance for Tribal Clean Energy and the Solar Energy Industries Association (SEIA) launched a curriculum in October for clean energy developers and service providers called "Pathways To Trust." SEIA said in a press release that the curriculum "addresses common knowledge gaps that often derail cross-cultural collaborations and equips participants with practical tools to build mutually beneficial partnerships."

However, one cultural difference between tribes and external developers — the specific details of laws and regulations on tribal lands — also presents an opportunity for tribes to shape their own energy future, said Claudio Clini, policy analyst at the Alliance for Tribal Clean Energy, during a November conference call.

"We've been having discussions with tribes about rollbacks that would replace federal environmental safeguards with tribal laws and regulations, where applicable," Clini said. "In this way, we can work toward a future of self-determination where tribes fully exercise the full force of their regulatory capacity and jurisdiction."

Reassembling projects

The $220 million "Tribal Energy Resilience and Sovereignty project" aims to build a network of nested microgrids in northern California benefiting multiple tribes. The project lost an $88 million grant after the Trump administration canceled the Department of Energy's Grid Resilience Innovation program.

Halvorsen said these microgrids, backed up by batteries and solar, would provide greater reliability for the tribes they serve, which sometimes experience power outages lasting up to 20 consecutive days.

The Alliance for Tribal Clean Energy has been working to make up for lost federal funding through partnerships, philanthropy, and other sources.

"It took us about six months to shift from extremely disheartening meetings (with low morale) to 'maybe we can do this, maybe we can reassemble,'" said Halvorsen, whose team is coordinating the project's fundraising and financial structure. "We're talking to the vast majority of impact investors in this space and building a community — not just in terms of supply chain and development talent, but also the financial world, whether public or private."

Although tribal nations are working hard to save many ongoing projects, the shock of suddenly losing funding is immense. Pratte said that losing not only the projects themselves but also the associated jobs is "truly devastating for many communities."

"It creates a ripple effect — hotels, construction communities, utilities, and so on — all of a sudden all of these are hit hard," she said.

"Changes in administration and policy shifts have indeed had a profound impact on tribes," Smith said. Although multiple coalitions are suing the Trump administration over the cancellation of "Solar for All" funds, the alliance chose not to file a lawsuit but instead to help tribes "protect the value of the work they've already done," she said.

However, Clini said in November that the alliance is continuing to work with the Federal Energy Regulatory Commission (FERC) to secure a waiver of the $5 million commercial readiness deposit (which projects must pay to remain in the interconnection queue) for tribes. The alliance has argued to FERC that tribal projects' interconnection requests are not speculative in nature and that for most tribes, the deposit is unaffordable.

Even before President Donald Trump won re-election and began rescinding Inflation Reduction Act funding, the alliance had foreseen this possibility and launched a program called "Solar for All TRIBES," "designed to ensure that the six tribal coalitions that received grants would not lose momentum due to political changes," Smith said.

"Every day we're doing triage on stalled projects and stranded engineering work, and we see our role as protecting that progress," she said. "Our goal is very simple: never let any tribal project die on our watch due to frozen funds."

Advantages of alternatives

Halvorsen said that even before the "Solar for All" grants were rescinded, he had already been concerned about potential problems with the program.

"I saw many flaws and was already thinking: How can we do this better? What would be the alternative to this program?" he said. "I was already worried about unfriendly government challenges and the possibility that some funds could be frozen or clawed back."

He was particularly concerned about the "Solar for All" requirement that each project guarantee a 20% savings on end-user electricity bills — a requirement he believed made little sense for projects on tribal lands.

"These calculations themselves can be very difficult to complete, so there's a lot of room for challenges," he said. "When there are so many communities at the end of power lines without access to reliable electricity, why is a 20% savings the most critical thing?"

Halvorsen said he sees a shift in mindset from grant-funded projects to third-party financed projects, where tribes "retain ownership from the start" and can leverage the Inflation Reduction Act's direct pay mechanism (which allows tax-exempt tribal nations to benefit from the legislation's tax credits) as an underwriting mechanism to "bring in construction and permanent financing."

With many of the Inflation Reduction Act's clean energy tax credits set to expire under the One Big Beautiful Bill Act (OBBBA), and with tribes being tax-exempt entities, "structuring things in a way that makes sense for all parties, combined with tribal ownership, is truly critical," Pratte said.

After OBBBA was passed, "I think one of the issues we have to solve is: where do we find the money and how do we keep moving the work forward, because we know energy demand will only continue to grow in the coming years," Pratte said. "Our thirst for energy will not disappear. As for tribal communities, we must be participants in this world."

One of the alliance's goals is to apply "all the good, bad, and ugly lessons learned" from the residential and commercial solar industries to tribal lands, to "develop, finance, build, and operate projects with tribal developers and tribal asset owners at the core from the very beginning," Halvorsen said.

"The more similar projects you can accomplish per dollar spent, the more efficient the whole program becomes," he said. "Scale is critical to making these projects break even, because any deployment of renewable energy — whether it's a single residential project, a hundred residential projects, a 100-kilowatt project, or a 100-megawatt project — carries substantial intermediary costs."

Halvorsen said that as tribal nations accept the formal cancellation of "Solar for All" and other federal clean energy funding sources, they have been able to turn to new ways of thinking about how to finance these projects.

"Indian Country generally has an aversion to debt, so the focus in the past was: if the federal government has free money, let's go after that first, rather than taking on any form of liability through debt financing," he said. "But now we're increasingly hearing: 'Oh, yeah, that's how we do it at the casino. Why can't we do that for clean energy power plants? These plants will become economic engines — potentially even more so than casinos.'"

These conversations happening now are "perhaps perfectly timed, for whatever reason," Halvorsen said. "I'm very encouraged that we will see the first large-scale residential solar project portfolios developed and built in 2026."