A Navajo community south of Monument Valley will be home to the tribe's first utility-scale solar plant capable of powering 7,700 homes on average.
The $64 million plant is on track to be built by the end of 2016, using federal loans and tax credits, said Walter Haase, general manager of the Navajo Tribal Utility Authority. Photovoltaic panels will be spread throughout 300 acres in Kayenta.
"It will be our first step in the green economy of the Navajo Nation," Haase said Monday. "When I walk into an office and someone says, 'Don't waste my time, nothing's ever been built,' I can say that's not true."
Companies hoping to build on the reservation often are challenged by the lack of infrastructure, required environmental clearances and consent from anyone holding a permit or lease for use of the land.
Haase said the 27-megawatt project had broad support from the community and had access to an electrical substation and transmission lines that can carry power to homes in the region, which made it economically feasible.
Navajo customers won't see an immediate increase in their bills. That's because the Salt River Project, a major utility in the Phoenix area, has a two-year agreement with the tribal utility to buy power from a natural gas plant the tribe invests in. The Salt River Project also will get credits to help meet its goal of having 20 percent of its portfolio from sustainable energy sources by 2020, said Tom Cooper, director of resource planning.
"This will play a relatively small role, but still, it has a part," he said.
Officials said the financial terms are confidential.
Haase said the tribal utility will work to extend its agreement with the Salt River Project after the two years or find another buyer for the power and renewable energy credits. He was confident that would happen but said it depended partly on talks with the U.S. Environmental Protection Agency on how power and credits could be transferred once plans for reducing carbon emissions take effect.
The tribe doesn't currently generate any of its own electricity, except for a few small solar facilities. The tribal utility spent $30 million on electricity last year from power plants that generate electricity from sources including water, coal and natural gas, said spokeswoman Deenise Becenti.
The solar plant is expected to create 100 construction jobs and a handful of long-term jobs.
Haase said it's significant for the reservation where more than 50 percent of the workforce is unemployed and where extended families often are supported by a single income.
He said the jobs also will help offset any losses from the coal industry.
"You have to take a step in the right direction," he said. "This is the first step and the first project. We need to keep building up on this and the momentum."