Four reservations have been identified which might generate central station renewable-based electricity at a lower cost (excluding transmission cost) than the wholesale cost of power sold to those reservations, assuming favorable transmission costs. These reservations are the Eastern Cherokee Reservation (NC), the Alabama and Coushatta Reservation (TX), the Coushatta Reservation (LA), and the Mississippi Choctaw Reservation and Trust (MS). Biomass is the renewable resource of choice on all these lands. The renewable electricity cost premium, excluding transmission charges, ranges from 0.1 cents per kWh to 0.7 cents per kWh.

Biomass is the least costly renewable resource on 52 of the 61 reservations having the lowest renewable central station electricity cost premium. The remaining 9 reservations (all in New Mexico) have wind as the least costly renewable resource. Biomass has a major advantage over wind because it does not require back-up power. Furthermore, connecting wind power facilities to the electricity grid requires a number of special considerations. Wind power, however is eligible for EPACT production incentive payments, while biomass facilities are eligible only if they are closed loop.

Despite its high absolute cost, rooftop photovoltaic installations  may  be feasible to provide limited electric service to a high number of Indian households without access to electricity on tribal lands, because no distribution or transmission facilities are required. This, of course, means that electricity will be unavailable at night unless some form of back-up power (e.g., diesel generators) or storage batteries is used--both high-cost options.

Compared with the Nation as a whole, Indian households on tribal lands overall pay essentially comparable rates (on a per kilowatthour basis) to those paid by non-Indian households with similar demographics. However, Indian households spend a greater share of income on electricity than do non-Indian households.

Electrification is a sizable problem for only a small number of Indian reservations. However, the reservation with the highest percentage of households without electricity, the Navajo reservation in Arizona, is also by far the largest reservation in the U.S. That one reservation accounts for about 75 percent of all Indian reservation households without electricity, and the non-electrified Navajo households represent about 10 percent of all Indian reservation households.