Feasibility Study: State - Tribal Partnership to Support Solar Energy

Project summary:

In this project, researchers analyzed the feasibility of a northern Minnesota solar project and accompanying Virtual Power Purchase Agreement (VPPA) between the Minnesota Department of Transportation (MnDOT) and the Red Lake Nation. Researchers analyzed three sets of benefits for MnDOT: government-to-government relations, environmental, and economic. In government-to-government relations, the research team found great potential for the VPPA to further a first-of-its-kind Tribal energy project and Tribal sovereignty. The team also summarized lessons from other governmental entities in pursuing VPPAs. For environmental benefits, researchers found the array will avoid between 48,000 and 89,000 metric tons of carbon dioxide-equivalent gases, resulting in a monetized environmental value of between $1 million and $9.4 million in avoided emissions-related damages. Finally, for economic benefits: while researchers found the array has a net present value (NPV) between a negative $5.5 million and negative $16.5 million to MnDOT, the team identified several project adjustments that could increase the value to more than a positive $3 million in NPV. In conclusion, researchers recommend MnDOT form a "strike team" to develop the project further, communicate the project clearly, and consult with outside experts on further project opportunities.