The tradition of nicknaming US states has made Florida the Sunshine State and Alaska the Last Frontier. But only one has given itself a second moniker, a move that matches its bold environmental vision.

Welcome to New Mexico, the Land of Enchantment – now also known as the Clean Energy State.

Since giving his state its new nickname four years ago, governor Bill Richardson has helped create at least 37 incentive programmes promoting green power.

From utility-bill discounts to a statewide renewable portfolio standard (RPS) for electricity, New Mexico's 2m residents are given every opportunity to weave clean energy into their daily lives.

"The RPS drives consumption of renewables within the state," Sarah Cottrell, Richardson's energy policy adviser, said. "We have so much potential here for wind and solar that it far exceeds the demand."

The state's journey to environmental leadership is even more notable because of the inaction that has persisted at the national level.

Although 25 states have approved their own RPS, a national standard has stalled in the face of resistance from traditional coal-powered utilities and their allies in Congress.

Wind and biomass are popular in New Mexico, but the desert sun that draws millions of tourists here also makes its solar power potential the second largest in America.

So it is that the Clean Energy State's future just may lie in the south corner of Albuquerque, at the end of a dry road marked by a mile-long sculpture of a snake with jewelled eyes.

The road ends at Mesa del Sol, a 13,000-acre development area that is poised to become a hotbed of the US solar industry.

Aided by a $10m (£5m) investment from the state government, Advent Solar is already producing cutting-edge "back contact" cells at Mesa del Sol. Advent's design places electric contacts at the rear of the solar cell panel rather than the front-loaded style common in most panels, maximising the light energy that is trapped for household use.

For now Advent focuses on exporting cells to the booming European solar market. "It's good for the trade deficit and good for the environment," company spokeswoman Misty Benham said.

That could change when Advent gets a new neighbour in Germany's Schott Solar. The world No 8 in cell production, Schott plans to invest $100m in its new Albuquerque plant.

"According to both industry analysts and our projections, the market for solar energy will double over the next five years," Schott chairman Udo Ungeheuer said as he announced the plant opening.

The prospect of two New Mexico-based solar companies vying for a foothold in the growing US market is a compelling one. "We're beating them to the punch," Benham, of Advent, said.

Yet again it all comes down to Washington – and the dream may slip away if Congress does not extend the solar energy tax credit this year.

Both the solar and wind credits are mired in political squabbling. Analysts warn that Schott and other companies could scale back their US investments without the certainty of a long-term tax benefit.

Still, New Mexico is working hard to earn its new nickname. Richardson formed the Western Climate Initiative last year with four other governors to focus on sustainability goals because, as Cottrell put it, "the feds aren't acting fast enough".

And just as Advent looks for a foothold over Schott in the New Mexico solar market, the state has found itself competing with nearby California over the pace of clean energy reforms.

Richardson's aides have developed a "pretty entertaining rivalry with Governor [Arnold] Schwarzenegger's people", Cottrell said. "We believe no one's done as much as fast as we have."

Despite the array of energy incentives available to New Mexicans, the state's achievement may ultimately be measured in what leaves its borders. The American southwest contains more than 250,000 square miles of land ripe for solar power generation, but the bigger challenge lies in transmitting that energy to the grid.

Barack Obama and John McCain are also working hard to win the southwest in November by emphasising renewable energy. The presidential rivals visited New Mexico within a week of each other last month, and Obama is heading to Las Vegas today for a town hall meeting to promote his clean-power plans.

With that in mind, New Mexico is taking steps toward the export of clean power, becoming the first US state to form a renewable energy transmission authority (Reta) that provides financing for new high-voltage lines and towers. (Texas, Nevada, and California have similar transmission initiatives.)

Transmission is not cheap - the average 345-kV power line costs $1.5m per mile to lay, according to the chief of New Mexico's Reta, former BP executive Lisa Szot. But it is one area where states can make progress.

"States need to be involved in transmission," Szot said. "The federal government isn't involved in permitting and siting [of new power lines]. That even goes down to the county level."

The process of building transmission infrastructure in New Mexico is a free-market conservative's dream: Szot fields ambitious proposals from clean energy firms and offers financing mechanisms, chiefly tax-exempt bonds, to those with the best project ideas.

Making the leap from New Mexico's homegrown green movement to a thriving solar power export market may be as simple as electing a Democratic president in November. Obama has put renewables at the top of his agenda, and the companies such as Advent are comfortable putting down roots in the Clean Energy State.

"The fact that [New Mexico officials] stood up and fought for us" convinced Advent to choose Mesa del Sol, Benham said. "They're very aware of renewables here."