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Despite challenges solar industry thrives in New Mexico

Nicholas Suhor

  New Mexico has a long history of leading solar development. This continues to be true, despite the closure of Schott Solar earlier this summer. A new company hopes to start manufacturing again at the Schott plant. It faces significant challenges from offshore competitors. But there are many other companies in the solar industry here that are finding success.

The vast Schott facility had fewer than 40 cars in the parking lot on a recent afternoon -- the last of 250 employees laid off by the solar panel manufacturer at its 200,00-square-foot plant south of Albuquerque where operations are winding down.

But over at Array Technologies, it’s a very different story.

“We have a very large amount of projects this year. We'll probably double in size again this year," says Ron Corrio, CEO of Array. "We've bee on a very high growth rate for the last four or five years."

The company employs 120 people in Albuquerque manufacturing solar tracking systems. Those tilt photovoltaic panels --  like the ones made by Schott --  so they get the maximum amount of sun throughout the day. That means getting more energy out of the solar panels, which convert light into electricity, and that’s very attractive to companies building large installations, like utilities. Corrio says for many years, Array did well just focusing on the residential market. But now its growth is coming from customers building these big projects.

Credit Megan Kamerick
Array Technologies builds solar tracking systems and has found numerous opportunities through large utility projects.

"We did recognize the utility-scale business was there early on," Corrio said. "We designed products to meet that. I would say we are the world leader in this technology now."

Utility-scale systems power hundreds or thousands of homes. Demand for solar by these companies is driven by state laws that require utilities to get more of their power from renewable sources, like solar and wind.
In New Mexico, utilities must get 10  percent of their energy from renewable sources. That jumps to 20 percent by 2020.

High-profile firms like California-based Solyndra, which declared bankruptcy after receiving $535 million federal loan guarantee, continue to be a source of political fodder in this election season, with the House of Representatives recently passing the No Solyndra Act. So why is Array booming while companies like Schott and Solyndra struggle? Corrio says those firms manufactured solar panels - or modules - and the prices for those have dropped through the floor.

“Modules have become commoditized and being a commodity, the lowest price wins.”

China now holds two-thirds of the market sharein solar panels, undercutting what American manufacturers can charge. And there were huge drops in silicon prices, a major component in panels, as well as a decline in demand in Europe as some countries cut back subsidy programs. Corrio says many of our consumer items already come from China. Why shouldn’t solar?

“It’s just a sign of the times and what we’ve chosen to do and how we’ve chosen to manufacture our goods," Corrio says. "We’ve chosen cheaper goods rather than keeping jobs here.Solar is no different.”

Those price declines are creating a boon for U.S. consumers, but also contributing to losses in manufacturing jobs here. Installing solar is a lot cheaper these days.

The Solar Industries Association says there are 5,600 solar companies across the country who employ about 100,000 people. Nationwide, installations of photovoltaic systems in the second quarter of this year grew by 116 percent. The U.S. now has enough capacity to generate 5.7 gigawatts of solar energy. That’s enough to power on million homes. Most of that recent growth was in the utility market.

That’s where companies like Array come in, as well as local firms that build the racking systems to hold solar panels, like Unirac and Direct Power and Water Corporation. They haven’t faced the same market pressures as panel manufacturers. But they’re not immune either.

Sacred Power Corporation is a Native American-owned firm in Albuquerque that makes and installs fully assembled solar systems. The companyexpanded significantly in the last few years. It’s tapping into increased federal spending on solar at military installations as well as federal grants for Indian Country.  That helps it keep a competitive edge, says CEO David Melton, and that’s crucial right now because more and more firms are entering the market.

“We’re just hanging on to what we’ve got going and what we’ve always done well, creating and designing our own systems," Melton says.

His workers are doing a final inspection on a new system, a stand-alone solar panel on a post, connected to battery that stores the power. He says it’s perfect for a rural locations, such as homes on the Navajo Nation that don’t have access to electricity or running water.

The lower prices for solar have been a boon to installation companies, but they, too face increased competition, says Regina Wheeler, CEO of Positive Energy Solar in Santa Fe. Her firm’s sales grew to 8.5 million dollars last year. That was helped by consumers taking advantage of rebates that allow customers to recoup the cost of buying the systems. Wheeler says there are also state and federal tax credits, and those subsidies are key.

“It’s very important," Wheeler said. "You know right now there's 30 percent federal tax credit, 10 percent state tax credit. If you add  40 percent of the cost of the system back to the consumer that would make a big difference."

Credit Megan Kamerick
Sacred Power builds and installs solar systems, including this standalone panel connected to a battery that stores power.

The state’s largest electricity provider, Public Service Company of New Mexico, or PNM, offers a rebate to customers who install solar systems. Depending on the system size, those subsidies started at between 13 and 15 cents. They were priced to kickstart the program. PNM customers pay between 9 and 13 cents per kilowatt hour for electricity. PNM officials say the subsidies have been dropping to reflect the declining price of solar panels and allow the utility to add other renewable resources. The rebate is now at 5 cents, but may decline further.

For companies focused on New Mexico, business tends to go up and down based on those subsidies. But if you’re big enough, you can diversify outside the state.

That’s one reason Affordable Solar will likely have 44 million dollars in sales this year, says founder David Hughes. The Albuquerque firm does the majority of its work outside the state, installing solar systems and distributing to other installers. Hughes is surprised by how much the industry has grown.

“This is nothing like when I started, nor would I have believed we’d ever be here where we’re powering hundreds of homes at a time instead of one home at a time," Hughes says.

Many of the incentive programs in New Mexico and nationally are due to expire at the end of 2016. Globally, incentives in general are starting to peter out, says Hughes, but he doesn’t necessarily believe that’s a bad thing.

"I don’t think any industry should continue to have incentives because it distorts the market. and if it can’t eventually survive on its own it doesn’t make sense," he says.

But costs have also been dropping, Hughes says, and the sector is getting close to so-called grid parity - meaning the cost of solar is nearing the cost of other forms of energy. That shift may need to happen even sooner than advocates had planned if a change in national leadership brings an early end to incentives.


Megan has been a journalist for 25 years and worked at business weeklies in San Antonio, New Orleans and Albuquerque. She first came to KUNM as a phone volunteer on the pledge drive in 2005. That led to volunteering on Women’s Focus, Weekend Edition and the Global Music Show. She was then hired as Morning Edition host in 2015, then the All Things Considered host in 2018. Megan was hired as News Director in 2021.