California to get $100 million factory producing 40GW of advanced grid equipment

Grid technology startup Heron Power will invest more than $100 million to turn a former warehouse in Morgan Hill, California, into a large-scale factory for advanced grid equipment, with production expected to begin in late 2027. The 286,000-square-foot facility will manufacture Heron Link, a 5-megawatt medium-voltage power conversion system designed for large energy projects and data centers. The company expects the factory to produce up to 10,000 Heron Links a year. Heron says that output would represent more than 40 gigawatts of annual capacity, roughly three-quarters of all new generating capacity added to the US grid in 2025. The facility is also expected to create more than 600 jobs in manufacturing, engineering and operations. The investment comes as the US grid faces growing demand from renewable energy, battery storage, electric vehicles and large data centers. At the same time, much of the equipment connecting these technologies to the grid relies on older hardware and imported components. Factory targets grid bottlenecks Heron Link is designed to replace several pieces of conventional grid equipment with a single modular system. The company says its system uses software-controlled semiconductors to manage power conversion, potentially improving efficiency and reducing the physical footprint of grid infrastructure. The company also says the technology can allow renewable energy, battery storage and data center projects to connect directly to medium-voltage transmission without a transformer. That approach is aimed at one of the biggest constraints facing new power projects: getting the hardware needed to connect generation and large electricity users to the grid. More than 80% of critical grid components such as transformers and inverters are imported, according to Heron. The company is positioning its new factory as a way to increase domestic production of equipment needed to expand the grid. “America’s grid has to grow faster than it has in decades. We’re seeing new demand from AI and EVs, and at the same time new supply from solar and storage,” said Drew Baglino, CEO and Founder of Heron Power. “The equipment running the grid hasn’t changed in fifty years. Heron Factory One in Morgan Hill is how we fix that. We’re manufacturing the leapfrog technology our grid needs, at scale, in America first.” California becomes manufacturing base Heron evaluated sites in several states before choosing Morgan Hill, putting its first large-scale manufacturing operation close to its engineering headquarters and the Bay Area’s manufacturing workforce. The project is supported partly by a $26.4 million California Competes award, a state tax credit administered by the California Governor’s Office of Business and Economic Development. The City of Morgan Hill, PG&E and state partners worked with Heron and real estate advisor JLL during the site-selection process. The company plans to begin preparing the site immediately, with mass production scheduled for late 2027. Heron says the factory will help it move from building its power conversion technology to producing it at a scale that can support major energy and data center projects. The company is betting that more compact, software-controlled power hardware can help utilities and developers handle a grid that needs to accommodate more generation and much larger electricity loads.For now, the Morgan Hill factory represents the first major step in that plan, combining domestic manufacturing with a new approach to grid power conversion.Get the latest in engineering, tech, space & science - delivered daily to your inbox.With over a decade-long career in journalism, Neetika Walter has worked with The Economic Times, ANI, and Hindustan Times, covering politics, business, technology, and the clean energy sector. Passionate about contemporary culture, books, poetry, and storytelling, she brings depth and insight to her writing. When she isn’t chasing stories, she’s likely lost in a book or enjoying the company of her dogs.