Native Village Integrates Solar and Storage to Cut Costs, Displace Diesel

Despite the nearly half a million barrels of oil produced in Alaska each day, there’s no such thing as a “hometown discount.”  Instead, some remote rural villages shell out as much as $1/kilowatt-hour (kWh) for diesel-generated electricity—more than eight times the national average.

In the Native Village of Hughes, that’s about to change. Hughes just installed the bones of a 120-kilowatt (kW) solar photovoltaic (PV) system that will cut diesel use and costs while advancing the Village’s renewable energy goal of 50% by 2025.

Photo of Hughes solar project.

Solar savings ahead—currently rural Alaska’s largest solar installation, this system will save Hughes an estimated $1 million over 20 years. Photo from TCC

Once the system is integrated with the local power system, Hughes—a small community on the Koyukuk River, 210 air miles north of Fairbanks—will be able to bring rural Alaska’s largest solar project online.

“High costs are the primary driver for Hughes,” said David Pelunis-Messier, who presented a status update on the U.S. Department of Energy (DOE) co-funded project at the DOE Office of Indian Energy 2018 Program Review in December. “Currently, Hughes is a fly-in-only community, which means they’re not just barging in fuel, they’re flying it in.”

Pelunis-Messier is the rural energy coordinator for the Tanana Chiefs Conference (TCC), a tribal nonprofit that serves 42 federally recognized tribes in Alaska’s Interior—a 235,000-square-mile region (about the size of Texas if you cut off the panhandle) that includes about 37 small villages located off the Alaskan road system and accessible only by plane, snow machine, or boat.

DOE Award Supports “Solarizing” Hughes Village

Hughes, a Village of about 110 residents, goes through more than 40,000 gallons of diesel for electricity generation annually. The Village powerhouse generates 100% of the electricity it produces from diesel flown in on Korean War-era planes. And because Hughes lacks sufficient fuel storage to make fuel delivery by barge cost effective, residents who use over 500 kWh per month pay more than $0.70/kWh—nearly four times the state average.

Solar, on the other hand, can be sourced and produced locally. And despite significant geographic and seasonal variation in the amount of sunlight in Alaska, the state’s solar resource is comparable to that of Germany, which leads the world in solar installations.

In September 2016, the DOE Office of Indian Energy provided $623,900 in grant funding for the Hughes Village Council’s “Sustainable Solar Energy for Hughes Village” project. The DOE grant supplements the Council’s contribution of $127,737 for the project, which aims to cut the Village’s annual diesel use by 25%.

The Council’s primary goal is to reduce electricity costs without affecting Power Cost Equalization (PCE), a state subsidy designed to offset the disproportionately high prices in rural communities and provide relief to households that use less than 500 kWh per month.

Village’s Renewable Goal Aims to Increase Energy Security, Keep the Lights On

“Hughes’ leadership is very forward-thinking, and they realized every dollar they spent on oil was a dollar that was leaving the community,” said Pelunis-Messier. Along with cutting electricity costs, the Council sought to increase tribal energy security and resilience. In 2015, they passed a renewable portfolio standard (RPS) with those primary goals in mind.

“An RPS is a place to start—and anybody can do it,” said Pelunis-Messier. “They’re a sovereign entity, and they said, ‘As a community that’s reliant on diesel, we want to look toward renewables and displace 50% of our diesel by 2025.’ This project, partially funded by DOE, goes a long way toward doing that.”

When it goes online this spring, Hughes’ solar-diesel microgrid is planned to have about 120 kWh of lithium-ion battery storage. That should allow the community to go “diesels off” and run entirely on solar during the summer when solar production peaks. The anticipated annual reduction in diesel use will save Hughes roughly $54,000 per year—more than $1 million over the project’s projected 20-year lifespan.

Although the solar array is the highest-profile piece of the project, Pelunis-Messier underscored the criticality of the planned battery system and microgrid control package for energy security and resilience. “If the lights go out, you don’t have your clinic, you don’t have your airport, you don’t have your water plant, you can’t make water. So making sure we’ve got a reliable system is most important.”

To that end, Hughes and TCC are working with a company in Anchorage to finalize the entire microgrid design and complete the system in a way that ensures the lights in Hughes stay on.

Local Labor Brings Local Benefits

Alaska crew installing solar panels.

Window of opportunity—a mild October bought the local crew time finish the install before snowfall. Photo from TCC

The Village also prioritized hiring local workers—an objective TCC shares. “One of the most important parts of this project is that we were able to put up this 120-kilowatt solar array using 100% local labor,” said Pelunis-Messier. “That was a big win … because a major goal of any project is always maximizing the number of local guys on the ground.”

To make that happen, he tapped Edwin Bifelt, an experienced energy contractor from the neighboring village of Huslia, to serve as the project manager. Bifelt, who became a certified solar installation specialist in September, jumped at the opportunity. Bringing solar energy to rural Alaska has been a longtime vision for Bifelt, who founded his company to help villages like his lower their energy costs. 

That calling has kept Bifelt busy. He has led several community-wide energy efficiency retrofits in the region over the past two years, starting with Huslia in 2017. Huslia’s project provided a template for success and led to opportunities in other communities that received DOE grants, including Ruby, Holy Cross, and most recently Hughes. 


All along, I wanted to be part of this project because it was one of the largest upcoming solar projects in the state and the largest in rural Alaska.

Edwin Bifelt
Owner, Alaska Native Renewable Energy Industries

“I was wrapping up my lighting projects when Dave reached out to see if I could run the Hughes project in October,” said Bifelt. “All along, I wanted to be part of this project because it was one of the largest solar projects in the state and the largest in rural Alaska. So I was excited and wanted to have a role in it.”

Along with being adept at navigating the challenges of installing a solar system in rural Alaska, Bifelt had a personal stake in the project. “I have a lot of family in Hughes—my mom is originally from there,” he said.

“If you can have solar PV within your community, it's a lot more sustainable. [For Hughes] it's a utility-scale project, so hopefully it eventually reduces the utility’s operating costs through reduced fuel costs and they can pass that on to the residents of Hughes. That's the overall goal.”

Success Breeds Success

Another goal of the project is to develop a PV-diesel hybrid electrical system other rural villages can replicate. Villages in Alaska’s Interior region use an estimated 1.7 million gallons of diesel annually for electricity. If all of these villages were to cut that by 25%, it would eliminate close to half a million gallons of diesel fuel burned each year.

As an organization that serves 37 Alaska Native communities in the Interior, TCC shares DOE’s goal of creating replicable models for success. “We’re not trying to find a one-off system that works in one community,” said Pelunis-Messier. “We’re after projects we can do across as many of our communities as possible because it’s not just Hughes that has a high cost of energy.”

A row of solar panels shining in the sun.

Sun up, diesels off! With 120 kWh of battery storage, Hughes looks forward to all-solar summer days. Photo from TCC

Seeing Is Believing

After Hughes commissions its microgrid in spring of 2019, residents may finally get the hometown discount that has eluded them.

In this case, the savings will come from an unlikely yet distinctly sustainable source—the sun. As Bifelt’s neighbors to the north begin to reap the benefits, he hopes other villages will see they too can produce electricity from renewable sources.

“The concept is simple. It just takes energy from the sun … Just seeing it and seeing how it operates gives people a different mindset,” he said. “Hopefully, they can see a project of this size and say, hey, we can probably have that here in Huslia, Galena, Bethel, Holy Cross, or Ketchikan.”


Learn more about how the DOE Office of Indian Energy supports Alaska Native Villages.


Karen Petersen
Karen Petersen is a communications strategist at the National Renewable Energy Laboratory’s Communications & Public Affairs Office.
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