Unlocking Tax Credits for Renewable Energy on Tribal Lands

Unlocking Tax Credits for Renewable Energy on Tribal Lands

We understand the sacred connection that Native American Indian Tribes share with the lands they steward. Renewable energy initiatives are a gateway to economic prosperity for many tribes. Our legal team can help tribes leverage tax credits to develop renewable, sustainable energy projects such as solar farms, wind turbines, geothermal power plants, biomass and biofuel combustion, and hydroelectric power plants on tribal lands.

Every tribe is unique, and so are their lands and their aspirations for them. We will engage with you, respect your traditions, and develop an understanding of your clean energy objectives. Our experience representing tribal interests has resulted in collaborations and successful negotiations with federal and state agencies. We are here to ensure your tribe’s voice is heard and its rights are upheld.

2022 Inflation Reduction Act and Tax Credits for Indian Tribes

The 2022 Inflation Reduction Act established several tax credits for American Indian Tribes to help with the development and implementation of renewable energy projects. By combining these tax credits with available grants, even smaller tribes with limited resources can significantly reduce the start-up cost of renewable energy projects, and start to generate power and revenue 

Here’s a detailed list of the available tax credits:

Direct Pay Provision:

Tribal governments can claim a payment from the IRS equivalent to the amount of the tax credit. This payment acts as a refund after a clean energy project is operational.

Investment Tax Credit (ITC)

Designed for solar, small wind, and geothermal energy projects, the ITC can significantly reduce the tax liability for tribes, making renewable and clean energy development economically possible.

Production Tax Credit (PTC)

Ideal for wind and biomass projects, the PTC can provide substantial tax relief based on the amount of electricity generated, maximizing the financial benefits for tribes.

Advanced Energy Project Credit

This credit supports tribes seeking to establish energy projects that employ new, innovative technologies, providing financial incentives to pioneer groundbreaking renewable energy solutions.

New Markets Tax Credit (NMTC)

Tailored for investments in low-income communities, the NMTC can provide substantial capital to tribes developing renewable energy projects in qualified areas, fostering community development and economic revitalization.

USDA Loan Program

Potential access to the USDA forgivable loan program and the Department of Energy Rural and Remote program, offering substantial loans and grants for larger scale projects.

   – USDA forgivable loan program: Loans up to $100 million.

   – Department of Energy Program: Grants up to $100 million.

Opportunity for Partnerships:

Eligibility to form partnerships with third-party developers or investors to co-develop or co-own the renewable energy projects, subject to specific IRS restrictions on partnership structures.

Each of these tax credits and provisions plays a crucial role in encouraging and supporting American Indian Tribes to embrace renewable energy projects, promoting environmental conservation, energy independence, and economic development within the tribal communities.

Our team of experienced Indian Law attorneys can help with matters like: 

Content Reviewed by Jeffrey Nelson – Indian Law

Attorney Jeffrey Nelson Headshot

Jeffrey Nelson leads the Firm’s  Indian Law Group, He’s spent  over 20 years of experience working in Washington, DC on Indian law and litigation matters, including as a Senior Attorney at the National Indian Gaming Commission and as an Assistant Solicitor at the Department of Interior. Jeff now represents tribes across the country on Indian gaming and tribal governance matters. He also serves as the Assistant Attorney General for the United Keetoowah Band of Cherokee Indians in Oklahoma. Jeff earned his law degree at the University of Michigan Law School in 1997 and an LL.M. in Advocacy from Georgetown University Law Center in 1999.

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