SANTA FE, N.M. – March 7, 2024– Last month, the Advanced Energy Equipment Income Tax credit, was signed into law by New Mexico Gov. Michelle Lujan Grisham. The credit, effective Jan. 1, 2025 through the end of 2032, offsets up to 20 percent of the costs of equipment to produce components that qualify under the federal Inflation Reduction Act’s 45X provision for solar energy, wind energy, battery manufacturing, and rare earth element production. The credit is equal to 20 percent of qualified equipment costs up to a maximum $25 million per project and capped at $25 million per year.
“New Mexico’s business-friendly manufacturing climate continues to draw investment from major manufacturers across the globe,” said New Mexico Partnership President and CEO Melinda Allen. “This new incentive will continue to keep New Mexico at the forefront of advanced manufacturing innovation.”
The credit includes clawback provisions if the facility stops operations for 180 days within two years of claiming the credit. The credit will be implemented by the Energy, Minerals and Natural Resources Department in partnership with the Departments of Economic Development and Taxation and Revenue.
Lucrative state incentives, like this new tax credit, when combined with New Mexico’s low cost of doing business and experienced manufacturing labor force have continued to drive new project announcements and in-market expansions for a wide range of manufacturers. This business-friendly manufacturing climate is why New Mexico had $1.3 billion in combined manufacturing project announcements in 2023, including:
Singapore-based Maxeon Solar Technologies, a large-scale PV cell and panel manufacturer that announced plans to invest more than $1 billion to build a 1.9 million-square-foot complex that will include solar cell fabrication, panel assembly, a warehouse, and administrative offices on a 160-acre site located in the community of Mesa Del Sol in Albuquerque, NM;
Australia-based Star Scientific, a green hydrogen research and development company that announced plans to invest $100 million to build a multi-million-dollar manufacturing and research and development complex on a 50-acre site located in the community of Mesa Del Sol in Albuquerque, NM;
Taiwan-based Hota Industrial Manufacturing, a producer of automotive gears for North American and European clients, including Tesla, that announced plans to invest $99 million to build a manufacturing facility on a 30-acre site in the Westpark Industrial Park in Santa Teresa, New Mexico;
Germany-based mtex Antenna Technology, an antenna and telescope technology company that announced plans to invest $16 million to build a 70,000-square-foot manufacturing facility at the Sandia Science and Technology Park in Albuquerque, NM;
Texas-based Arcosa Inc., a manufacturer of infrastructure-related products and solutions, announced plans for Arcosa Wind Towers, an Arcosa subsidiary, to invest $55 to $60 million to purchase property, modify the existing plant, and procure necessary equipment for a new wind tower manufacturing facility in the Rio Grande Industrial Park in Belen, New Mexico;
Ohio-based Monti Inc., an industrial component manufacturer that announced plans to invest $14 million to renovate an 80,000-square-foot site in Santa Teresa, NM;
Albuquerque-based Array Technologies, a utility-scale solar tracking technology manufacturing, design and engineering company, that announced plans to invest $50 million to expand its current manufacturing operations to a 216,000-square-foot facility on a 22-acre site in Albuquerque, NM;
New Mexico-based Geobrugg, a multinational company that manufacturers high-tensile steel nets that announced plans to invest $8.8 million to build a new 20,000-square-foot facility to increase production capacity and 4,195 square feet of office space on a more than 13-acre site in Algodones, NM. This expansion will nearly double the size of the current 25,000-square-foot facility;
and, North Carolina-based ABB Installation Products, a cable accessory manufacturer that makes solutions undergrounding, grid hardening and wildfire mitigation, that announced plans to invest more than $40 million to build a 90,000-square-foot greenfield manufacturing facility in Albuquerque, NM;
In addition to the advanced energy tax credit, the Governor also signed into law a tax bill that:
- Will lower income taxes by more than $160 million for New Mexicans;
- Create a new income tax credit for New Mexicans who purchase electric or plug-in electric hybrid vehicles beginning this year, as well as for purchase and installation of charging units;
- Increase in the aggregate cap for the Solar Market Development Tax Credit from $12 million to $30 million with an additional $20 million available for homeowners who missed out on the credits in recent years because of the existing cap;
- Provide Geothermal heat pump and electricity credits;
- Reduce Gross Receipts Tax through a deduction for energy storage systems sold to governments;
- Provide other benefits for individuals and families.
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