New Mexico Business Weekly – Green business brings in the green

February 8th, 2008  |  Published in Articles

By  Laura Paskus; Special to NMBW
Location of Article – New Mexico Business Weekly
Original Article URL – Green business brings in the green
Date – February 8, 2008

The Land of Enchantment has it all: sunny skies, blustery winds on the eastern plains, national research facilities, U.S. senators with expertise in the energy industry, willing and skilled labor — and state, county and local governments eager to help green businesses locate to the state.

Most people are familiar with the term “green energy,” which usually refers to wind or solar power and energy derived from geothermal or biomass sources.

But there is more to it than that. So-called green businesses must be sustainable in two ways, says Jeanne Logsdon, Rust Professor of Business Ethics at the University of New Mexico’s Anderson School of Management: environmentally and financially.

“You have to be practical when you think about which ideas you can really implement in the business,” she says, and a certain type of balance must be achieved.

“Being a green business means caring about the environment, but also keeping your eyes peeled for the evolution of ideas in this area,” she says. “In particular, it’s kind of an attitude, as well as an investment and a commitment, and you have to be constantly on the look out for those opportunities on the horizon.”

To encourage the growth of green industries, within the past few years, the state of New Mexico has implemented a range of tax credits, incentives and programs to encourage renewable energy and energy efficiency (see related sidebar on next page).

And the more green businesses that locate here, the more attractive the region becomes.

Gary Tonjes, president of Albuquerque Economic Development, cites a handful of green businesses, including the solar companies Schott Solar Inc., Emcore and Advent Solar Inc., as well as Tesla Motors Inc., Altela Inc. and Miox Corp.

“These are all examples of new technologies and people who are addressing problems and are ideal in terms of not just the growth opportunities, but the kinds of companies and industries we want to see here,” he says. “That is absolutely the future, and New Mexico and Albuquerque are well-positioned to play a big role within that.”

The past five to 10 years have witnessed a surge of interest in green building and sustainable design, says Alexander Dzurec of Autotroph Design in Santa Fe, a firm that specializes in environmental sustainability and innovative designs.

Part of that rise in awareness and excitement has to do with the Leadership in Energy and Environmental Design, or LEED, green building rating system, he says.

New Mexico, for instance, now offers tax credits for new commercial and residential buildings that comply with LEED standards, and many government agencies require their new buildings be LEED certified.

One downside of the state tax credit, however, is that nonprofit organizations cannot take advantage of them.

“A lot of our clients are nonprofits — arts organizations and affordable housing organizations,” says Dzurec. “But if the owner of the building doesn’t pay taxes, there is nothing to take a tax credit against.”

That said, business is good.

“Now, there is somewhat of a green revolution happening in the building industry, and hopefully the economy all around,” he says. “It is exciting to be a part of that in this time in history.”

While Autotroph is poised to take advantage of that boom in the industry, Dzurec’s goal remains, he says, “To create beautiful buildings that are good for the planet.”

Aside from the obvious incentives and recruitment efforts, there are other ways that green businesses can be encouraged to thrive.

For instance, when the state’s Environment Department modified its Solid Waste Act, that provided a huge business opportunity to Soilutions, a permaculture landscaping company that also operates a composting facility in Albuquerque’s South Valley.

That change, explains owner Jim Brooks, “allowed food scraps — as long as it is source-separated stuff and not mixed with garbage — to be treated as a recyclable as opposed to solid waste.”

Now, companies such as Whole Foods Market compost their food waste with Soilutions, and Brooks hopes that someday businesses at Mesa del Sol might follow that lead.

Sunshine is plentiful in New Mexico, but that’s not the only reason solar technology manufacturing companies are finding the state so attractive.

For its part, Advent Solar was spawned out of the technology transfer program at Sandia National Laboratories, says marketing manager Misty Benham.

The company’s co-founders, she says, “basically transferred the technology to the public sector to commercialize it in the solar market.”

After raising the initial capital, Advent’s co-founders worked closely with some of New Mexico’s state senators, as well as the mayor of Albuquerque and Gov. Richardson, to secure other funding and tax incentives.

“We wanted to stay [in Albuquerque] because of the close ties to Sandia,” she says, adding that, while other locations made attractive offers, “Albuquerque did a really good job in meeting those.”

Now, the company occupies an 87,000-square-foot facility at Mesa del Sol and employs 160. Its building is also LEED certified, the state’s first manufacturing facility to have attained that certification.

Then, in January, Schott Solar announced it would be investing $100 million in the creation of a 200,000-square-foot solar energy technology manufacturing facility at Mesa del Sol. Manufacturing receivers for concentrated solar thermal power plants and photovoltaic modules, Schott will initially provide 350 jobs.

As the market grows, Schott North America spokesman Brian Lynch says the company will someday employ up to 1,500.

Having been active in the solar business for about a decade, Schott recognized the vast growth potential in the United States, Canada and Mexico for the solar industry, says Lynch, and embarked on a site selection mission.

The company chose Albuquerque for its skilled labor force and geography.

“The major market for these products is in the desert southwest,” Lynch says. “So being close to our customers and the geographic position was certainly a major factor.”

But he also calls the state’s support for the solar industry “incredible.”

“We view New Mexico, under Governor Richardson’s leadership, as being a leader and a pioneer in making solar viable in the U.S.,” he says. “And everyone from the state to the county to the city of Albuquerque worked well together to help us locate there.”

The state could do even more to stimulate the solar industry in New Mexico, says Marlene Brown, president of the New Mexico Solar Energy Association.

She points, for example, to California’s “One Million Solar Roofs” initiative, which the state supported with $2 billion in funding.

The public has a role to play, as well.

“If people want to have more green businesses and more environmentally conscious type building structures, they need to demand it,” Brown says.

Challenges still remain for green businesses, even for those whose track records are well established in the state.

The biggest challenge facing the wind industry, for example, is the fact that the state’s transmission lines are at capacity.

Aside from favorable weather conditions and landowners receptive to hosting wind turbines, what brought Austin-based Cielo Wind Power LLC to the state was an effort by Xcel Energy and the state Public Regulation Commission to create a green power program allowing customers to buy blocks of wind power, says Walter Hornaday, Cielo’s president and founder.

“Our first push was to support that green marketing program of Xcel’s, and that was successful in getting New Mexico on the map as a green power state,” he says.

In 2004, the state implemented a Renewable Energy Portfolio Standard, which calls for the increased use of renewable energy by electric utilities.Once the state passed legislation providing tax credits for projects in New Mexico, Hornaday points out, that spurred several large projects — of Cielo and two other companies — that were built in rapid succession in 2004, 2005 and 2006.

Those tax credits definitely lured wind projects to the state, he says, even though the electricity itself was meant for markets in other states. Those credits in fact allowed companies operating wind farms in New Mexico to supply larger electricity markets, particularly those in California.

Now, however, the transmission capacity is strained by the number of wind projects in the state.

For the market to continue growing, he says, New Mexico needs to invest in its transmission lines.

That is something Gov. Richardson and the Legislature have already begun prioritizing through the creation of the state’s Renewable Energy Transmission Authority, which focuses on planning, financing and implementation of new electric infrastructure.

“If they were to upgrade the wires that go west from New Mexico, the wind farms and wind projects in New Mexico are much more efficient than anything you could build in Arizona or California,” says Hornaday.

“That would immediately result in capital investment in New Mexico [by more wind companies] and increase its position as a wind exporter.”

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