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Kit Carson Electric Cooperative had its $15 million federal grant for building microgrids in wildfire-risk areas canceled by the U.S. Department of Energy (DOE) in 2025, prompting the utility to seek funding from the New Mexico Energy, Mineral and Natural Resources Department. Despite federal policy, renewable energy is flourishing in New Mexico, which supplied 50% of the state’s electricity generation from renewable sources in 2024, six years ahead of the state mandate. However, the state’s renewable energy industry faces challenges, including the 2027 deadline for wind and solar energy projects to qualify for federal tax credits, the DOE’s shift to incentivize fossil fuel plants, and restrictions on working with certain foreign entities.
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Rural Energy Project Loses Federal Funding Amid Political Controversy
In 2023, Kit Carson Electric Cooperative was selected by the U.S. Department of Energy (DOE) for a $15 million federal grant. The funding was aimed at building microgrids in rural areas susceptible to high wildfire risk. However, two years down the line, the DOE withdrew the award, making it one among the 321 nationwide grants for energy projects that were canceled.
Federal Judge Rules on Grant Cancellation Allegations
In an unexpected turn of events, a federal judge ruled in favor of the plaintiffs who claimed that DOE officials terminated grants based on the states’ presidential voting behavior. They alleged that projects in states that didn’t vote for then-president Donald Trump were specifically targeted.
Kit Carson Turns to State Funding
The grant cancellation became a crucial learning experience for Luis Reyes, the CEO and general manager of Kit Carson. He explained how they managed to cover a significant portion of the withdrawn federal funding through an award from the New Mexico Energy, Mineral, and Natural Resources Department’s community benefits fund.
New Mexico’s Renewable Energy Industry Thrives
In spite of the efforts to hinder the renewable energy industry during Trump’s presidency, New Mexico thrived in the sector. By 2024, despite a 2030 deadline, renewable energy sources were already supplying half of the state’s electricity. Utility-scale solar installations experienced a significant rise in 2024 and 2025, with the power companies planning to replace retiring coal plants with solar farms bolstered by battery storage systems. By 2025, New Mexico had surpassed Wyoming by having the maximum number of land-based wind energy farms under construction. It had nearly 3.7 GW worth of projects in the pipeline.
Changes in Energy-Related Laws
Trump’s “One Big Beautiful Bill,” which was passed in July, revoked key incentives introduced under the Inflation Reduction Act (IRA). Signed into law by former President Joe Biden in August 2022, the IRA was often referred to as the most impactful climate bill ever passed in the U.S. The new legislation introduced a Dec. 31, 2027, deadline for wind and solar energy projects to qualify for a federal investment tax credit and a production tax credit. These credits were initially scheduled to phase out in the next decade under Biden’s law.
Impact on Local Businesses
Local businesses like Maxeon Solar Technologies faced significant challenges due to these changes. Despite Maxeon proposing a $1.9-billion factory in Albuquerque’s Mesa Del Sol development, financial and political roadblocks brought the project to a standstill. The Trump administration’s restrictions also affected Ebon Solar, which had plans for a manufacturing facility in Mesa Del Sol, leading to construction delays.
Advances in Battery Technology
Desert Mountain Energy Corp., a Canadian-based helium and natural gas producer, proposed to build a sodium-nickel-chloride battery manufacturing factory in Roswell. The project, estimated to cost around $120 million, could create nearly 180 jobs. Interestingly, the company did not depend on government subsidies to support the project.
Note: A previous version of this article incorrectly included a construction start date for Desert Mountain Energy Corp.’s proposed sodium-nickel-chloride battery manufacturing plant in Roswell. The company has not yet announced a construction start date.
© 2026 the Albuquerque Journal, Albuquerque, N.M. Distributed by Tribune Content Agency, LLC.
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