Heron Power to Build $100 Million Advanced Transformer Factory in California
Heron Power announced plans on August 13, 2026, to invest over $100 million in a 286,000-square-foot manufacturing facility in Morgan Hill, California, to produce next-generation power electronics for the U.S. electrical grid. According to corporate press materials, the plant aims to manufacture up to 10,000 Heron Link medium-voltage power conversion systems annually starting in late 2027, addressing acute supply chain bottlenecks that currently leave over 80 percent of critical grid components imported.
While solar installations, battery storage arrays, and artificial intelligence data centers scale rapidly, the hardware connecting them to the high-voltage transmission system remains largely mechanical and decades out of date.
Scaling Production in Morgan Hill
Located 30 minutes south of San Jose, the newly selected site will undergo immediate structural preparation. Heron Power evaluated multiple state locations before settling on the Bay Area footprint to capitalize on local engineering talent pools. According to Dee Dee Myers, Senior Advisor to Governor Newsom and Director of GO-Biz, the expansion is supported in part by a $26.4 million California Competes tax credit administered by CA GO-Biz.
The facility is slated to generate more than 600 jobs spanning advanced manufacturing, engineering, and operational roles. Mass production is scheduled for late 2027. At full capacity, the plant’s targeted output of over 40 gigawatts annually equates to approximately three-quarters of the entire new generating capacity added to the U.S. grid during 2025, which marked the largest single-year buildout in over twenty years, per company data.
Technology and Grid Integration Challenges
Traditional transformers and mechanical switchgear struggle to handle the bidirectional power flows demanded by distributed energy resources. Heron Power’s flagship product, the Heron Link, utilizes intelligent, software-controlled semiconductors to condense multiple discrete pieces of grid equipment into a single modular 5-megawatt unit. This design reduces physical footprints and mitigates the risk of cascading failures during peak load periods.
Economic Context and State Support
The City of Morgan Hill, PG&E, and state partners worked with real estate advisor JLL over a ten-month site selection process.
As site preparation gets underway in Morgan Hill, the broader test for Heron Power will be executing its manufacturing ramp on schedule to meet surging demand from data center developers and utility providers.