Clean energy finds a foothold in New Mexico despite federal pullback

In October 2023, Kit Carson Electric Cooperative learned that the U.S. Department of Energy selected its project for a $15 million federal grant to help it build microgrids in rural areas that face high wildfire risk.

But two years later the DOE notified the utility, which supplies some 30,000 northern New Mexicans with electricity, that it was canceling the award. It was one of 321 such terminations of grants for energy projects across the nation. 

In January, a federal judge sided with plaintiffs who sued the DOE, alleging agency officials decided which grants to cancel based on whether the states where they were located voted for President Donald Trump.

For Luis Reyes, CEO and general manager of Kit Carson, the episode served as a lesson in navigating energy policy in Trump’s Washington, D.C.: Turn to New Mexico.

An award from the New Mexico Energy, Mineral and Natural Resources Department’s community benefits fund helped cover much of the canceled federal funding, he said.

Despite Trump’s efforts to hamstring the renewable energy industry, it is thriving in New Mexico, which in 2019 passed a mandate requiring utilities to take fossil fuel power plants off the system by 2045. 

In 2024, renewable energy supplied 50% of the state’s electricity generation, six years ahead of the state mandate for that amount of renewable power, according to the U.S. Energy Information Administration. Utility-scale solar installations in the state soared in 2024 and 2025 as the state’s power companies look to replace retiring coal plants with solar farms backed up by battery storage systems. In 2025, New Mexico overtook Wyoming for the most land-based wind energy farms under construction, with 3.7 GW worth of projects in the pipeline. 

“We’re going to get to a clean grid,” U.S. Sen. Martin Heinrich told the Journal as he toured battery storage companies in Albuquerque earlier this month. “This administration certainly is not helping that. And in fact, I would say this administration is throttling a lot of projects whose impact would really be just keeping the prices at the retail level of consumers lower.”

Trump’s “One Big Beautiful Bill,” passed in July, rolled back major incentives passed under the Inflation Reduction Act, or IRA, which former President Joe Biden often called the most consequential climate bill ever passed in the U.S. after he signed the legislation into law in August 2022. 

Trump’s bill put a Dec. 31, 2027, deadline for wind and solar energy projects to qualify for a federal investment tax credit — given for investing in wind and solar farms — and a production tax credit paid when such farms sell power. Under Biden’s law, those tax credits were not scheduled to phase out until the next decade. 

For Reyes, the change compressed the timeline for a solar project in Questa.

“Now you really have to compress the construction cycle,” Reyes said. “Projects that have taken three years — you compress to 18 months.” 

Houston-based NRG Energy described Trump’s bill in a blog post this way: It “doesn’t eliminate clean energy, but it reshapes the playing field with fewer subsidies and less spending. ”

Trump’s bill also overhauled the Department of Energy’s Loan Programs Office, which gave out loan guarantees to certain clean energy projects. Instead of focusing on carbon emissions reductions, Trump’s new rules incentivize energy projects that provide stability and reliability to the grid, including fossil fuel power plants, a stark change to the office’s goal to reduce emissions so the U.S. can meet climate targets. 

New Mexico’s Advanced Energy Equipment Tax Credit provides a 20% corporate income tax credit — up to $25 million per project — for equipment that produces components for renewable energy projects, including solar, wind and battery-based power. Companies can take advantage of the credit until 2032 by applying with EMNRD. Gov. Michelle Lujan Grisham signed the bill into law in March 2024.

The state tax credit was meant to supplement the federal 45X tax credit, which provides the same incentives, passed in the IRA. 

In New Mexico, Maxeon Solar Technologies, a Singapore-headquartered solar panel and solar cell manufacturer, proposed a $1.9-billion factory in Albuquerque’s Mesa Del Sol development to produce such products. 

Maxeon asked the DOE for a $1.2 billion loan guarantee for the project. The company ran into roadblocks with tariffs and liquidity problems on its balance sheet. A Chinese company acquired a majority stake in Maxeon, raising questions about whether the DOE should award loan guarantees to foreign adversaries. 

Trump’s bill restricts how companies that qualify for certain tax credits can work with so-called prohibited foreign entities, which include U.S. competitors such as China. 

Earlier this year, Maxeon backed out of the project, a decision a spokesperson told the Journal was based on a “strategic restructuring of our business.” City and state officials awarded Maxeon for its promise to create some 1,200 new jobs with millions in Local Economic Development Act funds and industrial revenue bonds.

Another company, Ebon Solar, a subsidiary of Singapore-based chip manufacturer Ebang International, also pitched a solar cell manufacturing facility in Mesa Del Sol. But construction has been delayed on that factory, too. Representatives of Ebon Solar and its parent company did not respond to emails or phone messages about the status of that project. 

Desert Mountain Energy Corp., a Canadian-headquartered helium and natural gas producer, has proposed to build a sodium-nickel-chloride battery manufacturing factory in Roswell, which will use produced water from regional oil and gas wells to support cooling and processing for battery production, as well as a planned artificial intelligence data center. 

Desert Mountain Energy CEO and Chairman Robert Rohlfing cites Germany’s advances in battery technology — he says sodium-nickel-chloride batteries are a safer alternative to lithium-ion batteries — as evidence of its market potential. He said the project, which could cost from $115 million to $120 million, will begin construction late this year. Up to 180 jobs could come as a result. 

While Rohlfing has talked with state economic development officials about the project, he is not leaning on government subsidies to build it.

“We feel this is cost-effective to do even without a lot of government input,” he said. “This is something that’s needed. It can be done the good old-fashioned way — you don’t have to necessarily have a lot of tax dollars to do it.”

Justin Horwath covers tech and energy for the Journal. You can reach him at jhorwath@abqjournal.com.