Clean energy continues to expand rapidly in New Mexico, where state policies and market demand are pushing the clean-energy transition despite federal policy shifts. The state has become one of the fastest-growing renewable energy hubs in the United States after lawmakers passed a 2019 mandate requiring utilities to phase out fossil-fuel electricity generation by 2045.
Progress has moved faster than expected. Renewable sources already supplied half of New Mexico’s electricity generation in 2024, reaching the milestone six years ahead of schedule, according to the U.S. Energy Information Administration.
The biggest driver of that growth is solar power. Companies are building large-scale solar farms paired with battery storage systems, displacing the aging coal-fired plants across the state.
Wind power is also accelerating. By 2025, New Mexico had overtaken Wyoming for the largest amount of land-based wind capacity under construction. About 3.7 gigawatts of wind energy projects are currently in the pipeline.
State leaders say the momentum reflects both policy direction and market forces.
“We’re going to get to a clean grid,” said Martin Heinrich, a senior United States senator who hails from New Mexico. The senator recently toured battery storage companies in Albuquerque. “But the federal government is slowing down projects that would actually help keep electricity prices lower for consumers.”
Developers, however, continue to invest in renewable projects across the state even with shifting federal incentives and tighter timelines for tax credits. They are betting that New Mexico’s abundant sun, strong winds, and supportive policies will keep the clean-energy boom moving forward.
Clean energy boom hits roadblocks
State officials have tried to counter federal uncertainty with a suite of state incentives. Gov. Michelle Lujan Grisham signed in March 2024 the Advanced Energy Equipment Tax Credit. The law provides a 20 percent corporate income tax credit of up to $25 million per project for manufacturing equipment for renewable energy technologies. The program runs through 2032.
One of the major projects linked to the program was a proposed $1.9-billion solar manufacturing facility by Maxeon Solar Technologies in Albuquerque’s Mesa Del Sol district. The Singapore-based company asked for a $1.2 billion federal loan guarantee from the Department of Energy. But the Singapore-based firm ran into financial troubles, tariffs, and geopolitical complications after a Chinese company acquired a majority stake.
Trump’s legislation had tightened restrictions on companies receiving tax credits if they work with “prohibited foreign entities.” Company executives say the policy landscape changed sharply after Congress approved Trump’s One Big Beautiful Bill in July. The law has rolled back major incentives from the Biden administration’s Inflation Reduction Act.
Maxeon withdrew from the project earlier this year. The company cited a strategic restructuring. The firm was expected to create around 1,200 jobs.
Betting on new battery technology
Not all projects rely on subsidies, however. Desert Mountain Energy Corp., a Canadian energy company, seeks to build a sodium-nickel-chloride battery manufacturing facility in Roswell despite a federal policy pullback.
The plant plans to produce water from regional oil and gas wells for use in cooling and battery processing. The facility may also support a future artificial intelligence data center in the state.
CEO Robert Rohlfing said the technology offers a safer alternative to lithium-ion batteries. The project could cost $115 million to $120 million and could create up to 180 jobs. The plant construction may begin later this year.
Rohlfing said the Canadian company does not rely heavily on public subsidies. “We feel this is cost-effective even without a lot of government input,” he said. “This is something that’s needed. It can be done the good old-fashioned way.”