Developer sPower Teams Up With Navajo Power to Replace Coal Plant With Solar

Solar heavyweight sPower and local startup Navajo Power are chasing a 200-megawatt deal with Arizona utility Salt River Project, but that’s just the beginning.

JULIAN SPECTOR II May 06, 2020

For decades, the massive coal-fired Navajo Generating Station powered the great cities of the desert southwest: Los Angeles, Phoenix, Las Vegas. Yet the Navajo Nation that hosted it contains 75 percent of all the households in the U.S. that lack electricity, according to the American Public Power Association.

The 2,250 megawatt plant shut down in November, leaving job losses and underutilized electrical transmission infrastructure in its wake. Now, startup Navajo Power wants to fill the vacuum with massive solar power plants while channeling the proceeds into electrification and economic development for Navajo communities.

On Wednesday,Navajo Power took a big step toward that ambition by signing a co-development deal with renewables powerhouse sPower, GTM has learnedNavajo Power also announced an initial close of $4.5 million out of a planned $10 million seed round of funding.

Arizona utility Salt River Project, which operated and partially owned the coal plant, is seeking bids for 200 megawatts of solar on Navajo land by the end of 2023. Under the sPower deal, it will collaborate with Navajo Power on project of that size, with a plan to expand up to 750 megawatts. sPower brings access to capital and a track record of developing gigawatts of renewable projects around the country, while Navajo Power specializes in the unique requirements of development in Navajo territory. TOP ARTICLES

Navajo Power CEO Brett Isaac is a Navajo entrepreneur who grew up on the reservation and previously spent years delivering off-grid solar to Navajo households without access to the electric grid. He teamed up with long-time friend Dan Rosen, who co-founded and still serves as chairman of Mosaic, a leading solar loan provider. Rosen met Isaac a decade ago while working on energy and water issues in the region.

The seed funding was led by the Candide Group and joined by Align Impact and the Navajo Nation’s Community Development Financial Institution. The investors had to get comfortable with the startup’s public benefit commitments, which cap executive compensation relative to the lowest paid employee, and pledge at least 80 percent of profits to solar projects or community investment.

“We deal with land, we deal with resources, we deal with politics,” Isaac said in an interview. “We’re building a network of people who understand how to do large projects out on tribal lands.” 

The nature of the challenge is not technological so much as social: it requires community organizing and business model innovation.

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