Each week, Investment Monitor’s editors select a deal that illustrates the themes driving change in our sector. The deal may not always be the largest in value or the highest profile. We select it because of what it tells us about where the leading companies are focusing their efforts and why, or which locations are attracting investment. We pick apart the deal itself and the industry theme behind it. This thematic deal coverage is driven by our underlying disruptor data, which tracks all major deals, patents, company filings, hiring patterns and social media buzz across our sectors.
Singapore’s Maxeon Solar Technologies has announced it will invest $1bn (S$1.36bn) in a manufacturing facility in Albuquerque in the US state of New Mexico, creating up to 1,800 jobs.
Why it matters
The southern states of the US get a lot of sunlight. Indeed, New Mexico is the second sunniest of all the US states, behind only Arizona, so the fact that it was so attractive to Maxeon is perhaps unsurprising. Aside from New Mexico’s natural attractions, however, what is particularly interesting about this deal is the involvement of the administration of US President Joe Biden and its Inflation Reduction Act (IRA), which was designed to direct hundreds of billions of dollars away from fossil fuels to assist consumers in buying electric vehicles and to help companies produce renewable energy.
Indeed, Bill Mulligan, Maxeon’s CEO, was quick to state when announcing the deal: “Thanks to the support of the Biden administration, the US is now poised to re-shore and scale up a domestic solar supply chain. This will enhance national energy security and create a new cadre of well-paying manufacturing jobs.”
He went on to add: “The Inflation Reduction Act has catalysed a new chapter in the US’s energy transition. Our new solar cell and panel facility in New Mexico is an ambitious and concrete response to the need to decarbonise the US economy while creating permanent highly skilled local manufacturing and engineering jobs.”
Meanwhile, New Mexico Governor Michelle Lujan Grisham said: “This private investment shows how our state programmes, paired with President Biden’s Inflation Reduction Act, have charted a path for New Mexico as a leader in growing the clean energy economy and creating a strong workforce for the future.”
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So, all hail the IRA. After Donald Trump’s war on globalisation, and with it foreign direct investment (FDI), it seems somewhat reassuring to see a US president come up with a directive that entices overseas business to the country.
On this, Investment Monitor chief economist Glenn Barklie says: “The IRA is certainly moving the needle when it comes to inward investment attraction. It is not only bringing FDI projects to the US, it is bringing big projects to the country. Our data shows that the US is now receiving one in every five global mega-investment (those with a capital investment of $1bn-plus) since 2022. These investments are typically in key strategic sectors. Maxeon is directly targeting the US market for its outputs, which ensures the US will remain a leader in clean energy.
“More generally, solar PV FDI projects have enjoyed year-on-year increases since 2019. The US is becoming a significantly bigger destination market for such investments.”
Things are about to get uglier in the US, as Trump faces myriad court cases while plotting a return to the presidency. Whether he spends January 2025 in a jail cell or in the White House is a huge unknown for the world’s largest democracy. One thing that is for sure is that in a country teetering on the brink of recession, Biden needs as many wins as possible to take on the campaign trail in late 2024. Winning big deals such as Maxeon’s investment in New Mexico will do him no harm whatsoever.
Maxeon describes the Albuquerque project as a “new world-class, 3-gigawatt facility will be designed to produce latest-generation TOPCon PV-silicon cell technology and the company’s proprietary shingled-cell performance line solar modules to meet rapidly growing demand for domestically produced solar panels”. The 65-hectare site will house the $1bn investment, creating “up to 1,800 new highly skilled manufacturing jobs”.