A very well written article in the Republic today highlights Arizona's continuing inability to attract solar manufacturing operations to the state. The primary reason for this is that Arizona provides few, if any, incentives to manufacturing businesses to locate new plants here. From the article:
But most solar panels, mirrors, frames and other equipment are made elsewhere. In case after case, the state has fallen short of the competition. At least 10 companies have looked at Arizona in the past two years but decided to move their factories and about 4,500 workers to other Western states.
Business experts say the state needs to use some of the tax credits and other tools used by those other states to diversify its housing-dependent economy and deliver the state high-paying manufacturing jobs.
Other, much less sunny states provide strong tax incentives and have been successful in growing a critical mass of solar manufacturing operations.
Oregon, for instance, offers a 50 percent tax credit to pay construction costs for renewable-energy equipment manufacturers. Development officials say it has helped them land seven international solar manufacturers in two years. Most of those companies had considered coming to Arizona.
And the fear is that once other cities get that critical mass, like Silicon Valley with tech, the momentum will build in those areas and new solar companies will generally locate in those hubs in order to take advantage of laborers and professionals there who are skilled in catering to the solar industry.
Economic development officials say the solar industry isn't likely to spread evenly over the country but grow around those cities established as hubs.
They say Arizona still has a narrowing chance at being one of those hubs.
"Right now, there are 11 companies looking to decide (on factory sites) this year," said Barry Broome, president of the Greater Phoenix Economic Council, a proponent of the incentive bill. "We may be in or out (of the industry) after two quarters."
So until the Arizona legislature gets its act together and realizes the opportunity they are missing to grow our economy, the following will continue to be the reality and we continue to rely more and more on construction and services here instead of well paying manufacturing jobs.
Arizona has strong selling points, such as its weather and a workforce with manufacturing skills. But factories require expensive buildings, lots of energy and hundreds of employees, making the economics much more important than, say, a corporate headquarters that simply needs office space for a few dozen employees.
"If you're comparing Portland, Albuquerque and Phoenix, I know I can get real estate, labor, transportation, they're all within one or two points of each other," Colson said. "Then I overlay the incentives on top of that. Albuquerque jumps up, Portland jumps up and Phoenix actually goes down.
"That's why the Greater Phoenix region is not winning these projects."
I encourage everyone to read the whole article as it does a good job laying out how a state that has 320 days of sunshine a year can have an almost non-existent solar manufacturing industry.
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