Solar manufacturing
New Mexico has a long history as a frontrunner in efforts to build a sustainable solar industry, and Maxeon is not the first company to establish a solar-panel factory here.
German company Schott Solar PV Inc. opened a 200,000-square-foot panel-making facility at the Mesa del Sol planned community in south-central Albuquerque in 2009. And, before that, venture capital-backed Advent Solar Inc. also made panels at an 87,000-square-foot plant at Mesa del Sol.
But Advent was sold to a California company in 2009 after the Great Recession dried up capital markets, starving the company of needed credit to continue operations. And Schott Solar shut down its operations in 2012 as intense competition from low-cost imports from China and other Southeast Asian countries squeezed domestic manufacturers out of the market.
Despite those setbacks, New Mexico has maintained a solid manufacturing base for other solar components, with both Array Technologies and Unirac becoming national leaders for solar trackers and mounting platforms for solar installations. In fact, Array Technologies is now one of the world's largest makers of solar trackers, which are used to increase generation from utility-scale solar arrays by tilting and turning panels to follow the sun.
The company, which was originally formed in 1989 and went public on the Nasdaq Global Market in October 2020, reported nearly $1.64 billion in revenue last year. It currently employs 300 people in New Mexico — including about 200 at a 43,000-square-foot manufacturing plant in Albuquerque — plus hundreds more at facilities in other states and countries.
And, like Array, Unirac has steadily built its business into a national brand for solar racking systems over more than two decades. It originally launched in 1998 in Albuquerque, slowly building its operations at the Springer Industrial Park north of Downtown, where it currently employs nearly 200 people at an 80,000-square-foot factory, plus a 16,000-square-foot warehouse.
Since the loss of Advent and Schott Solar, however, no other company has attempted to re-establish a panel-making operation in New Mexico — much less a solar-cell factory — until Maxeon announced its investment plans on Aug. 10.
A game-changer
Unlike previous manufacturing operations, the Maxeon investment could elevate New Mexico's industrial base to unprecedented levels, turning the state into the nation's premier domestic supplier of both solar cells and panels.
Today, no company in the U.S. makes solar cells, which are the basic photovoltaic components that go into panels to convert sunlight to electricity. All solar-cell production is now based overseas, with the vast majority in China and other Southeast Asian countries.
There are many U.S. firms that make solar panels using imported solar cells. And, many have announced plans to significantly expand their operations following approval last year of the federal Inflation Reduction Act, which offers manufacturing tax credits of up to 30% to either offset new investments in U.S.-based factories, or to subsidize domestic production of solar cells and panels once facilities are up and running.
But Maxeon — which currently makes its products in Mexico, Malaysia and the Philippines — is the first company to re-shore its solar cell and panel operations to the U.S., making New Mexico the first state in the nation to recruit a global manufacturer back to the country.
And, apart from launching the nation's first domestic solar-cell plant in more than a decade, Maxeon will integrate its own cells into solar panels, producing nearly twice the number of finished panels annually than its closet U.S.-based competitor, according to the company.
Maxeon plans to build a 1.9 million-square-foot facility at Mesa del Sol, producing up to 8 million panels a year based on its projected annual manufacturing capacity of 3 gigawatts of solar cells and panels. For context, that's roughly enough generating capacity to power about 460,000 homes per year.
It could also expand that capacity over time to 4.5 GW, although the company won't make a decision on that until later this year. But to put that in perspective, the entire U.S. solar industry produced a total of 5 GW of solar panels in 2022.
The company will immediately invest $1 billion in the initial 3 GW plant, and potentially up to $2.4 billion if it expands to 4.5 GW. But even at 3 GW, it plans to hire up to 1,800 permanent employees after the factory comes online in 2025.
That alone would nearly double the state's solar industry workforce.
As of year-end 2022, New Mexico employed just over 2,000 people in solar-related occupations, according to the latest National Solar Jobs Census, an annual report that the Interstate Renewable Energy Council published in July.
It would also narrow today's gaping ratio between solar workers connected to system sales and installations vs. employees in manufacturing occupations, which offer stable, high-paying opportunities for skilled workers and engineers. Currently, the service workforce accounts for about three-fourths of all solar-related jobs in New Mexico.
And, as industry hiring ramps up, it could attract a lot more people seeking solar careers, expanding the labor pool here for all solar-related companies, said Ryan Centerwall, CEO of Affordable Solar, the state's largest installation company.
"As local jobs grow and more people join the industry, it could create the flywheel effect we need for sustainable growth," Centerwall told the Journal.
Lifting all boats
Indeed, Maxeon is expected to spur a lot more solar-related economic activity.
"We expect the new plant will serve as an anchor to attract further regional investment in the solar supply chain," Maxeon CEO Bill Mulligan said in a statement.
That will create more opportunities for local, homegrown firms, said Unirac CEO Peter Lorenz. And, as a worldwide industry leader, Maxeon's presence could encourage more out-of-state solar firms to consider locating here.
"We're bringing an iconic, solar-technology leader into New Mexico," Lorenz told the Journal. "Maxeon is one of the pioneers of the global solar industry, and its investment here will help develop the local ecosystem, including everything from research and development to supply businesses and technical service firms that can build up around it."
Nationally, Maxeon's operations could solidify New Mexico's reputation as a prime supplier of manufactured components and services for the solar industry across the country, especially when combined with Array Technologies' solar trackers and Unirac's mounting platforms, said Bob Bellemare, CEO of Affordable Solar's sister company, Gridworks, which manages utility-scale solar and battery installations in New Mexico and other states.
Gridworks itself brings battery-storage systems to the table through design services and subcontracted manufacturing.
"We're achieving almost vertical industry integration within New Mexico," Bellemare told the Journal. "Things like wires, inverters and so forth are what's left to fill things out, because we now have the foundational supply-chain components right here in New Mexico."
In addition, Maxeon's cells and panels will help boost solar deployment in New Mexico and elsewhere by alleviating supply-chain bottlenecks that undercut the industry following the global pandemic, Bellemare said. Those challenges continue today.
"The industry is in desperate need of PV modules, because most suppliers are sold out by two to four years in advance of projects," Bellemare said. "We would have loved to see this factory built yesterday."
Maxeon production can also help developers access a 10% tax credit included in the Inflation Reduction Act for solar and other clean-energy projects that incorporate made-in-America components into their systems and installations, Bellemare added. That's because 100% of steel — and at least 40% of all other components that go into projects — must come from domestic manufacturers to qualify for the tax credit.
Affordable Solar and Gridworks themselves will become regular Maxeon customers, Ryan Centerwall said. Both companies already use Array's solar trackers and Unirac's racking systems in nearly all their installations.
"Having Maxeon right in our backyard gives us real confidence going forward," Centerwall told the Journal. "We see them as a key supplier for us in the future."
Wind generation and manufacturing
While the Maxeon investment offers a major, unprecedented boost to the local solar industry, the state is also steadily building its standing in other clean-tech industries, particularly in wind generation and manufacturing operations, and in production of new technologies based on green hydrogen.
One company, Pattern Energy, is about to break ground on an enormous transmission line and wind farm in central New Mexico that could become the largest such wind generation and delivery project in the Western Hemisphere when it comes online in 2026.
Pattern will invest $8 billion on the SunZia project, which includes a 550-mile, high-voltage line that will run from the Corona area in Lincoln County to south-central Arizona. It will transport up to 3 GW of renewable electricity to customers in California and other western markets from nearly 1,000 wind turbines that Pattern will install in Lincoln and two surrounding counties.
That's enough clean power to meet the energy needs of some 3 million people, according to Pattern.
The project received final approval from the U.S. Bureau of Land Management in May.
"We expect to break ground in early September," Pattern spokesman Matt Dallas told the Journal. "We're just waiting for a final 'notice to proceed' from the BLM to start construction."
Pattern already built a 155-mile transmission system, dubbed the Western Spirit project, that came online in late 2021. That line — which at the time was New Mexico's largest new transmission project since the 1980s — now carries more than 1 GW of renewable generation from Pattern wind farms in the Corona area to a Public Service Co. of New Mexico substation on Albuquerque's West Side, where it then moves through the Four Corners on existing transmission infrastructure for sale in western markets.
Pattern's projects are helping to open the state's gusty eastern plains to massive wind development for the first time, converting New Mexico into a major renewable energy supplier for western states. That's something state government has pursued for nearly 20 years.
And two other projects are now in the works:
RioSol, a 550-mile transmission line that will run parallel to SunZia to carry up to 1.5 GW of electricity to western consumers.New Mexico North Path, another 400-mile line to transport 4 GW of renewable electricity from new clean energy projects planned in northeastern Union County to Farmington for consumption in both New Mexico and the West.
Apart from turning New Mexico into a clean-energy export mecca, the transmission and wind projects will generate significant economic activity through local product and service suppliers.
"We're still in negotiations with suppliers for components, but we can't announce anything yet," Dallas told the Journal. "But, yes, there will be a lot of stuff that's locally sourced."
The projects will also create thousands of construction jobs and hundreds of permanent ones. SunZia alone will employ about 2,000 construction workers, and then about 110 permanent employees.
The expansion of wind generation in New Mexico and the Southwest, combined with clean-energy tax incentives under the Inflation Reduction Act, has attracted the state's first wind-related manufacturing operation.
Texas-based Arcosa Inc. announced in March plans to invest up to $60 million in a wind-tower factory at the Rio Grande Industrial Park in Belen, where it will employ about 250 people when the facility begins production in 2024.
President Joe Biden visited the Arcosa site on Aug. 9, where he touted the impact of Inflation Reduction Act tax credits in boosting domestic clean-energy manufacturing.
"We look forward to expanding our manufacturing capacity to New Mexico, where market demand for new wind projects is robust," Arcosa President and CEO Antonio Carrillo told the Journal in an email. "Our new facility will strengthen our position in the wind tower market and enable Arcosa to benefit from growing wind investment in the Southwest."
Hydrogen-based aviation
Meanwhile, hydrogen is emerging as a major new player in New Mexico's clean-energy industry development.
New Mexico and three other states — including Colorado, Utah and Wyoming — submitted a joint proposal in April to the U.S. Department of Energy to compete for up to $1.25 billion in federal funding to help build a regional "hydrogen hub" that would include hydrogen manufacturing operations, conversion of coal plants to hydrogen-powered generation, and projects to fuel transportation and agricultural machinery with hydrogen. Those projects would be spread out among the states, with four of them targeted for New Mexico.
It's a controversial proposal, however, with significant opposition from environmental groups. That's because many of the projects would rely on extracting hydrogen molecules from methane in natural gas in a process that emits significant amounts of carbon, potentially undermining the environmental benefit of replacing fossil fuels with hydrogen to reduce greenhouse gas emissions.
Most environmental groups adamantly oppose that, favoring instead electrolysis production, whereby hydrogen molecules are pulled from water rather than natural gas, with no carbon emitted in the process.
At least two of the proposed projects in New Mexico will use the non-carbon electrolysis process to produce "green hydrogen."
And, independent of the regional hydrogen-hub proposal, another company plans to invest $254 million in a new manufacturing facility at the Albuquerque International Sunport to build breakthrough technology that can rapidly convert turboprop aircraft to hydrogen propulsion based exclusively on green hydrogen.
The California-based company, Universal Hydrogen, has developed a drop-in "powertrain" conversion kit to retrofit existing turboprop aircraft, used for regional in-state and interstate passenger service. It's also created modular hydrogen capsules to fuel up planes using existing transportation and logistics, which eliminates the need for expensive modifications to airport infrastructure.
The company plans to locate its manufacturing headquarters at the Sunport, where it will produce all the powertrain conversion kits and the hydrogen fuel capsules, employing more than 500 people when the facility comes online in 2025.
The company has repeatedly test-flown a hydrogen-propelled turboprop plane in Washington state since March, when it completed its first maiden flight. Since then, it's gradually increased duration and height, said company co-founder and general counsel Jon Gordon.
"We've flown eight or nine times since March, with another flight coming up in late September," Gordon told the Journal. "We accomplished the largest hydrogen flight ever (in aviation) of over one hour and up to 10,000 feet."
The company has orders from major airlines in the U.S. and Canada to immediately convert hundreds of turboprop aircraft from kerosene-fueled engines to hydrogen once its Albuquerque factory is churning out powertrains and modular hydrogen fuel capsules. It expects to break ground early next year.
"We're finishing up our final design for the site now, and we already have our construction partners in place," Gordon said. "We'll make an official announcement about our progress in the fall."
