A $150 million solar-plus-energy-storage microgrid project under construction on lands of the Viejas Band of Kumeyaay Indians in Alpine received a big financial assist Friday from the U.S. Department of Energy.
The federal government will provide a first-of-its-kind loan guarantee of up to $72.8 million to help fund the project via the Tribal Financing Program that supports Native American tribes investing in energy projects. The program was recently expanded through the Inflation Reduction Act.
“I think this really opens the doors for tribes to embrace energy sovereignty and play in this sector and in this space, which has been very challenging in the past,” said Nicole Reiter, vice president of development and tribal liaison at Indian Energy, a Native American-owned business based in Anaheim that will own and operate the Viejas Enterprise Microgrid.
Developers broke ground in March 2023 and construction is expected to wrap up in September 2025. Indian Energy officials said construction is about 60 percent complete.
The microgrid project will consist of a 15-megawatt solar array atop carports at the Viejas Casino and Resort and a nearby 70 megawatt-hour battery storage facility. The two systems will be connected by a 12,000-volt distribution line.
“This solar microgrid project will enable us to create a reliable and sustainable source of clean energy for our gaming, hospitality and retail operations going forward,” Viejas Band chairman John Christman said in a statement.
It will also help keep the lights on in the event of public safety power shutoffs — the practice where utilities such as San Diego Gas & Electric cut power to selected circuits when high winds and dry conditions increase the chance of downed power lines igniting wildfires.
Three fires in the past year at various battery storage facilities in the San Diego area have raised concerns about safety but developers say the batteries at Viejas will be resistant to thermal runaway, in which excessive heat results in a chemical reaction that spreads to other batteries.
Rather than lithium-ion batteries seen in many storage fires, the project will use a combination of vanadium flow batteries from manufacturer Invinity Energy Systems and zinc-based liquid batteries produced by Eos Energy Enterprises.
“They don’t catch fire and they don’t wear out,” former Invinity CEO Larry Zulch told the Union-Tribune in 2022.
The batteries from both companies are designed to run for 10 hours rather than four hours, as seen in conventional battery storage systems.
When fully up and running, developers say the Viejas project will be the largest single-location solar photovoltaic system in the country and California’s biggest behind-the-meter (systems that produce and store energy directly to consumers) energy storage system not using lithium-ion batteries.
“The money that’s required to actually play in this realm with these types of projects and systems and with this size of investment is new to these applications within Indian country,” said Allen James Cadreau, vice president of engineering at Indian Energy. “This is enabling Indian Energy and Viejas to enact tribal sovereignty through energy independence.”
The Department of Energy did not disclose the interest rate on the loan but Chris Creed, chief investment officer of the department’s Loan Programs Office, said, “we fully expect” the project will lead to cost savings and protect taxpayers from financial risk.
“You can think of this loan as having blazed a path through so that others could potentially follow behind it,” Creed said.
The program provides up to $72.8 million for a U.S. Bancorp Impact Finance loan of at least $80.8 million to complete construction of the microgrid.
The Department of Energy’s loan guarantee is also supported by anchor investments from U.S. Bancorp and Starbucks to build the solar array.
In addition, the project’s developers have received two grants from the California Energy Commission that totaled $43.3 million to develop the long-duration battery storage system.
The project is expected to create 250 construction jobs and eight permanent operations jobs.