Maxeon, Inc., a global solar company, plans to build a large factory at Mesa del Sol, a master planned community just southeast of Albuquerque, with a promise of eventually creating 1,800 jobs. If the company succeeds, they would be one of the largest manufacturers in the state. Other renewable energy companies have announced plans to open in the state as well, spurred on by incentives included in the federal Inflation Reduction Act.

Reporter Justin Horwath took a look at the promise of Maxeon , and the challenges the company faces in making its vision for opening shop in Albuquerque a reality. On Aug. 22, he joined Executive Director Trip Jennings and Managing Editor Marjorie Childress for a wide-ranging conversation about global realities of building a U.S.-based solar industry, touching on New Mexico’s long history working to cultivate a renewable energy sector.

Watch the video or find a transcript lightly edited for clarity below.

Hi, I’m Marjorie Childress. I’m the managing editor of New Mexico In Depth, and we’re having a discussion today with Trip Jennings, our executive director, and Justin Horwath, a reporter who just did this amazing story for us about efforts to create a solar energy sector in New Mexico. So, I thought maybe one way we could kick off our talk today is Justin, if you could tell us a little bit about yourself, your background, why you do reporting in this area, and big picture context for why you thought this was an important story.

Yeah, early in my career, I reported for a lot of the local publications here in New Mexico, the Santa Fe Reporter, the Santa Fe New Mexican and others. And then I moved on to S&P Global Market Intelligence. That’s what it was called at the time. Now they named it S&P Global Commodity Insights, but it’s part of the larger Standard and Poor’s brand. And so for five years, I covered renewable energy, like international markets, renewable energy, renewable energy finance, and got a big picture of what’s going on. In the past five years there’s been a lot of movement in the industry in terms of trying to grow renewable energy in the United States and globally.

I know it’s quite the background, and I could tell when you when you submitted your draft about the proposed Maxeon plant that would bring 1800 jobs to the Albuquerque area if it successfully opens. It’s a solar manufacturing company that’s gotten quite a bit of federal and state support to locate here. Can you tell us why this is important, the big picture, situate the Maxeon project and this other larger effort to get more solar companies in New Mexico – what is all this about?

So, the electric power industry likes to call the electric grid the biggest machine ever created by mankind, and we have found out that that machine is contributing to climate change, from fossil fuel emissions. And so, policymakers have passed, in various states, state incentives to phase out fossil fuels and grow renewable energy. And in 2022, President, Joe Biden signed the inflation Reduction Act, which really supercharged growth in the industry. And it’s kind of amazing. If you just look at the charts, the amount of solar power, the amount of new power additions in the nation and in the world are mainly solar power. It’s outpacing coal, natural gas, these fossil fuels. And in doing this, we found out that if we want to build more solar in the US, that we are dependent upon one of our main foreign adversaries, and that’s China. China is a country that sells that has most of the polysilicon, a material used in solar panels. And so we have this whole kind of weird interdependence with China. We want to gain energy independence, and so now we’re trying to incentivize manufacturers, to kind of sever our interdependence with China.

In particular, it’s the creation of this polysilicon?

Yeah, China is by far the world’s greatest manufacturer and seller of polysilicon, it’s not even a competition. I mean, if you want, if you want polysilicon, you probably have to go to China to get it.

It’s not just Maxeon, there are some other projects proposed for New Mexico that also would create that product. All of a sudden, New Mexico’s seen a plethora of these companies say they’re going to locate, with Maxeon being the largest, in the state. Is the inflation Reduction Act the main driver of that? Or, we often hear about these tariffs that have been slapped on Chinese products. Do you think that is the main driver?

Yeah, the inflation Reduction Act, I think that is one of the main drivers of the investments. I mean, it’s, it’s been really incredible, you know, covering renewable energy for SMP, just seeing – I’ve listened to hundreds of earnings calls and almost each one the executives and CEOs are citing the Inflation Reduction Act as a reason for making these investments. They see, in the case of Maxeon, they can get a federal manufacturing tax credit. Their customers can get discounts too for buying American made solar panels. These are incentives that are driving executives to make these decisions to invest, but the tariff part of it, that’ll be why they stay. If we have safeguards in place, if these companies feel like they can compete in a fair playing field, the tariffs are going to help with that.

Can we explain for folks who maybe don’t know what tariffs do economically, which is raise the price of these Chinese products so American manufacturers can compete, can we talk about just for a second, just to make sure that everybody understands that’s what the US is doing?

Yeah, yeah. There’s a little bit of history there. Barack Obama, when he got elected, that’s when renewable energy really kind of started to become mainstream. The Obama administration did a lot to try to attract renewable energy developers and manufacturers. We saw this in New Mexico with advent solar and shoot solar, and other solar companies that tried to set up manufacturing facilities in Albuquerque – you know, they only lasted a couple years because Chinese solar panels were flooding American markets. China doesn’t have to pay as high of wages as the US, and because it has gained some manufacturing efficiencies that we haven’t, their products are just so much cheaper than ours, and it’s difficult to compete for American companies. And so, the Obama administration in 2012 decided to start slapping some tariffs on these Chinese imports to make it a little fairer for American Solar manufacturers.

And then Trump slapped on more, and then Biden increased it more. Is that right?

Yeah, yeah. I think that Trump had, I think it was around 30% tariff on solar panels and solar cells. And Biden recently increased that to 50% [1] . That increase didn’t have a big effect on the industry, because the 30% tariff was already enough to disincentivize Chinese solar panel manufacturers from selling into American markets. So going from 30% to 50% didn’t really change things, other than to maybe send a message to the Chinese that we’re serious about this, that we’re gonna keep safeguarding US industry.

Can I add a little bit of New Mexico context? There was a point in time, in the 2000s when Richardson, Bill Richardson, was the Democratic governor, where they actually passed a renewable energy transition Act, or something like this, what which would actually help create pipelines that had to run a certain amount of renewable energy. So, New Mexico was kind of set up for this kind of thing. In addition to Advent and Schott, I just want to just throw it out there, New Mexico has been thinking about this for a while. That’s all I wanted to add.

I was really surprised when I first started reporting this, this story to learn that the developers of Mesa Del Sol had as early as 2005 envisioned this master planned community in southeast Albuquerque where all the homes were powered by solar power. And there would be solar power production factories right there in that field, right next to it. And that really surprised, 2005 – I mean, that’s really early to have a vision like that. And so, you’re right. I mean, New Mexico, I think, has seen this vision longer than others.

New Mexico is just, like, this odd kind of bird. They had the whole cap and trade thing that was happening in California. Well, New Mexico went there too, and arguably had Diane Dennis won [2] instead of Susana Martinez that would have happened. But Susana Martinez, when she came into office, rolled all that back, that momentum. But New Mexico is highly dependent on fossil fuels for its state budget, we have this huge Permian Basin and all the oil. So, on the one hand, we have a state that has really embraced trying to move its electric grid away from fossil fuels with, in more recent years, the Energy Transition Act and other types of measures. Meanwhile, it also tries to nurture the oil and gas industry and then there’s this whole piece around trying to really develop a solar energy economy. Which is not about, necessarily, transitioning our power grid, but it is about diversifying our economy away from fossil fuels. Because the state has always just been so dependent on one industry. I mean, as long as I’ve been here, which is quite a long time now, it’s just been a constant refrain: we’ve got to diversify, we’ve got to diversify. So, this plethora of solar companies now announcing that they’re going to locate here is just this dose of really bright news. It’s kind of good news. What I’m hearing you say is that the inflation Reduction Act might be a key driver of that?

Oh, for sure, yeah. I mean, it’s driving all the investment. Mark Roper, the interim secretary for the Department of Economic Development here in New Mexico, told me, we’ve talked for a while to about the need to move away from fossil fuels, but New Mexico can still be an energy state without necessarily being a fossil fuel state. So, policymakers, it’s almost impossible for them to not be resentful of the fact that so much of their state budget comes from one industry. And so, diversifying that and within the same within the same sector too, energy. So, this has been on people’s minds for a while. Can we do this? Can we, can we move away from this state that relies on one industry. Or what is it like, a third of their budget?

For folks who might be watching this later, and it’s been this way for as long as I’ve been here, the oil and gas industry through tax revenue and the large trust that they dump money into — all those revenues combine to more than 40% of the state budget every year.

The oil and gas industry has such a boom-and-bust cycle. A big reason why the New Mexico state budget has increased as much as it has in recent years, a lot of it has to do with these historic oil and gas revenues coming in.

I also want to say just real quick, this is why you will see, for folks who may be listening or watching later, this is why the governor and the state lawmakers are creating these large endowments for state agencies, because they’re preparing for that day when, who knows, the global markets aren’t as high as far as the price of oil and producing the best tax revenue and stuff.

I mean, to be frank about it, if we really want to think about the future, we have to think about peak oil. We have to think about a world in 2050 when most of the major governments across the world have foregone oil as a primary source of power. And I think that a lot of policymakers, I don’t think that that reality has really hit them, that in 30 years it’s going to be very difficult to be a fossil fuel company.

I want to add to, Justin, to what you just said, and Marjorie, also to what you said. The major oil and gas companies have been investing in renewables for a while. I mean, they know where this stuff is headed. It’s not like they’re not paying attention. They’re all about, you know, the future as well. So, I think that needs to be said just real quick.

Yeah, I agree. Covering that for five years, it was pretty amazing to me that the fossil fuel companies and even the oil majors see the writing on the wall. They see that they need to get into the renewables to survive. And the case with Maxeon, too, but Total Energy SE of France, one of the largest fossil fuel companies in the world for a while, was one of Maxeon’s larger investors.

That’s a good segue into talking more about the Maxeon project. I want to hear a little bit more about solar technology. Doesn’t all of this technology stem from the United States in the first place?

Yeah, the solar PV cell was invented in the 1950s in Bell Labs. I mean, solar energy is, is a uniquely American invention. And it took a while for us to get the point where we have commercially available solar panels and whatnot. But this is an American invention, and we really have ceded to China in both manufacturing and development, intellectual property, in so many different ways over the course of decades. We’ve seeded this technology to China really, in a lot of ways.

They would benefit from R&D. And, in fact, Sandia National Labs did a test of solar panels that Maxeon is ranked pretty well on. But, yeah, with any industry, really, if you have research and development, and education, and just kind of, that ecosystem, oh yeah. I mean, if I’m a solar company, I’m looking for ways to take advantage of the research and development from the labs, or even as customers. You know, the federal government also has priorities to go renewable for its own facilities. So there’s this whole ecosystem that can be created from not just research and development, but Maxeon’s idea was that if they could build this factory, that they can start a little regional supply chain – you know, New Mexico, Arizona and kind of have that snowball into something bigger.

Your story really examined the prospects for this plant to actually be built. They’re having a little bit of a rough patch at the moment. Do you want to talk that?

And part of that has to do with the geopolitical, economic trade war that’s going on between the US and China, right?

Yeah, I mean, this is all international and global. I think that a lot of developers have been upset that Europe is not placing more duties and tariffs on Chinese solar panels. Maxeon is having to compete with China all over the world, in Europe and Africa and different markets. And so, yeah, I mean, it’s, hard for them. They need tariff safeguards, apparently, to compete with these Chinese products.

So interesting. I think a big takeaway probably, for me, is it’s a reminder that when we read all the national and international news about trade wars and tariffs, that it really affects us here on the ground in New Mexico. Because we keep trying to develop this industry in the state. It keeps stumbling. It doesn’t quite happen. And now it feels like we’re on this cusp once again. And it could just, it just feels really tenuous, which is kind of what we said in the story.

Yeah, it is very tenuous. And yeah, as we said in the story, it really does depend on the whims of world leaders, global leaders. Whether New Mexicans have jobs, can really actually depend on the whims of, you know, President Xi in China. There’s not much we can do about it, except for maybe, if you’re a policymaker, you know, before offering these incentives, or kind of thinking about how to attract companies, or what companies to attract, you have to factor that in. I mean, Advent Solar, the state attracted them and a couple years later, they’re laying people off, they are closing their facilities. So, this really affects people’s lives. And I think from a state policymaker perspective, maybe think about attracting companies and industries that offer stability. You can’t always do that, but, yeah, you know, this is, this is a very tenuous thing here.

That’s one of the things that I really enjoyed about your story, was really the point that there are these external forces outside of New Mexico’s control that really would determine the jobs. And let me say this, we also have to remember that the one huge industry in New Mexico, the traditional industry, also was affected by international markets – the oil and gas industry. So, you have a similar thing going on with a new technology. I just found that extraordinarily interesting. Because sometimes it is hard, it’s very difficult to see the external forces that are maybe invisible to most folks that actually can determine the success or failure or something, some large economic development project.

And there’s almost nothing you can do about it, right? I mean, if Maxeon builds a plant, a worker gets hired and, you know, maybe they vote for one presidential candidate over the other based off their stance on tariffs. But other than that, there’s not much you can do about it.

It’s fascinating. Well, I really appreciate the reporting, Justin, and we’ll watch avidly to see what happens with Maxeon, as well as some of the other companies that are opening up. Any final thoughts from either of you, that you want to offer?

Yeah, just real quick. I mean, if you do want to find out what’s going on with Maxeon, I believe that they have an investor conference at the end of the month. And you know, anybody can go to their website and tune in and watch it. And I think that doubtless they will have news about this facility. I want to say it’s the August 29, but don’t hold me to that.

Do your own research!

This is going to be important for the policymakers, energy folks, New Mexicans, yeah, check out that call. And there’ll probably be some news about this factory pretty soon.

[1] Horwath misspoke during the conversation, initially saying Biden increased tariffs “to 30%”, meaning to say 50%.

[2] Democratic Lieutenant Governor Diane Denish lost the 2010 New Mexico gubernatorial election to Republican Susana Martinez.