Financial Incentives Lure California Solar Manufacturers Away

Just as Gov. Jerry Brown begins his term – after a pledge to create 500,000 green jobs – financial incentives are luring some California solar panel manufacturers to expand in other states.

This week, two Silicon Valley solar panel manufacturers announced they would build factories in southern states that offered business-friendly conditions and strong clean energy markets.

Stion, based in San Jose, will invest $500 million to build its new production facility in Hattiesburg, Miss., after the state agreed to a $75 million loan, and tax and training incentives. AQT Solar of Sunnyvale said it would spend $300 million to open its plant in Blythewood, S.C. The factories are expected to generate 1,000 jobs each.

And just before the new year, Wisconsin announced $28 million in tax credits to relocate a Chatsworth solar panel firm to the state. W Solar Group, located just outside Los Angeles, expects to create about 620 jobs at its new home in Dane County, Wis.

"Should California worry about a mass exodus?" asked Solar Industry, a trade magazine.

The state has embraced the solar industry and is eager to see it expand. But California is facing more competition from other states.

"I would say that California's incentives specifically relating to the mass production of solar panels are improving but not yet competitive to some other states," Frank Yang, Stion's senior director of business development, said in an e-mail. "We hope this will continue to change."

California has committed $30.6 million in federal stimulus funds to renewable energy manufacturing and production. On the campaign trail, Gov. Jerry Brown called clean energy the "key to our economic future," proposing major investment in solar and wind power and pledging to create half a million green jobs by 2020.

"California is such a wonderful incubator of talent and incubation," AQT Solar CEO Michael Bartholomeusz told Solar Industry. "They incubate companies like us, and then companies migrate to other locations."

Stion and AQT Solar say they are not pulling out of the state, where both manufacturers already operate plants. Yang said Stion is developing expansion plans for its San Jose facility, which currently employs 110 people – a tenth of its eventual workforce in Mississippi.

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