Understanding the spatial variability in highly heterogeneous natural environments such as savannas and river corridors is an important issue in characterizing and modeling energy fluxes, particularly for evapotranspiration (ET) estimates. Currently, remote-sensing-based surface energy balance (SEB) models are applied widely and routinely in agricultural settings to obtain ET information on an operational basis for use in water resources management. However, the application of these models in natural environments is challenging due to spatial heterogeneity in vegetation cover and complexity in the number of vegetation species existing within a biome. In this research effort, small unmanned aerial systems (sUAS) data were used to study the influence of land surface spatial heterogeneity on the modeling of ET using the Two-Source Energy Balance (TSEB) model. The study area is the San Rafael River corridor in Utah, which is a part of the Upper Colorado River Basin that is characterized by arid conditions and variations in soil moisture status and the type and height of vegetation. First, a spatial variability analysis was performed using a discrete wavelet transform (DWT) to identify a representative spatial resolution/model grid size for adequately solving energy balance components to derive ET. The results indicated a maximum wavelet energy between 6.4 m and 12.8 m for the river corridor area, while the non-river corridor area, which is characterized by different surface types and random vegetation, does not show a peak value. Next, to evaluate the effect of spatial resolution on latent heat flux (LE) estimation using the TSEB model, spatial scales of 6 m and 15 m instead of 6.4 m and 12.8 m, respectively, were used to simplify the derivation of model inputs. The results indicated small differences in the LE values between 6 m and 15 m resolutions, with a slight decrease in detail at 15 m due to losses in spatial variability. Lastly, the instantaneous (hourly) LE was extrapolated/upscaled to daily ET values using the incoming solar radiation (Rs) method. The results indicated that willow and cottonwood have the highest ET rates, followed by grass/shrubs and treated tamarisk. Although most of the treated tamarisk vegetation is in dead/dry condition, the green vegetation growing underneath resulted in a magnitude value of ET.