The New Mexico Public Regulatory Commission has given its blessing to the proposed power purchase agreement (PPA) between First Solar and El Paso Electric Power, for what will be the state’s largest solar power plant. First Solar bought the 50-MW Macho Springs solar project a few months ago from Element Power, which developed it on land leased from the New Mexico State Land Office in Deming (Luna County).

Two things are noteworthy in this deal. First is the size and scope: 50 MW, spread across 500 acres, is enough to power more than 18,000 homes in the state assuming average electricity usage of 669 kWh/month. Final development plans including mitigation strategies have been submitted and construction potentially could begin as soon as next month (with 300 jobs) with the site coming online by 2014. For the state land trust, lease payments over the 40-year term could potentially generate up to $40 million.

Then there’s the 25-year PPA itself, the details of which in a rare occurrence were made publicly available and still are: 5.79 cents per kilowatt-hour (kWh). State and federal incentives will add a couple of pennies to that, but still it’s well below what other thin-film solar PV projects have been selling for, well below the average price of new coal plants, and well below what First Solar had been expected to monetize from its other marquee solar projects (Antelope Valley, Topaz, and Agua Caliente). First Solar declined to discuss the profitability picture for the Macho Springs project, but did confirm that the PPA terms are unchanged.

First Solar is no stranger to New Mexico solar projects. In 2011 it built the 30-MW Cimarron Solar site now owned by Southern Company and Turner Renewable Energy, and the the 20-MW Santa Teresa solar plant, which when commissioned in late 2011 was the world’s largest thin-film tracker project. completed 22 MW of solar projects for PNM Resources. It’s also building another 20 MW-ac of solar projects for PNM Resources, expected to be completed later this year, on top of a previous 22 MW it built out for PNM a few years ago.

Lead image: OK gesture in front of the state flag of New Mexico via Shutterstock