Mississippi Lures ‘Green’ Manufacturing Jobs
The New York Times
September 8th, 2011
Calisolar, a Sunnyvale, Calif.-based manufacturer of silicon for solar cells, has decided to build its next factory in a faraway locale known for generous government subsidies, low taxes and relatively inexpensive labor rates: Mississippi.
Calisolar is the fifth green technology company in the last 18 months to announce plans to build manufacturing facilities in the Magnolia State, which is actively pursuing environmentally-friendly jobs. The state is giving Calisolar a $75 million incentive package that includes grants, workplace training and a $59.5 million low-interest loan.
The factory will cost approximately $600 million and produce 16,000 tons of solar-grade silicon a year when fully operational. Calisolar had planned to open a factory in Ohio supported by a $275 million federal loan guarantee, but didn’t think it would make a Sept. 30 deadline to begin construction, so it opted for Mississippi instead.
Other new Mississippi residents include San Jose’s Twin Creeks Technologies (which makes thin wafers for solar cells and received $54 million in state assistance), Kior (a biofuels company that got $75 million) and Soladigm (a developer of energy efficient windows that got $44 million).
Our colleagues on the Wheels blog also reported Thursday that a Mississippi-based company, GreenTech Automotive, planned to build electric cars in the state.
In all, the state has provided approximately $323 million in stimulus to green manufacturers.
In South Carolina, AQT Solar, another California company, is erecting facilities that are expected to produce a gigawatt of solar panels a year by 2014. AQT will start production this year with around 30 megawatts and ramp up to 1 gigawatt by 2014. The state’s main incentive is accumulated tax credits with some modest cash grants.
This shift to the South will collectively lead to thousands of construction jobs and several hundred full-time factory positions, say proponents. It could also help bolster the arguments made by the industry and the Obama administration that green manufacturing will create jobs beyond high-tech corridors like Silicon Valley.
Mississippi and South Carolina tend to be somewhat conservative politically. Neither state has a renewable portfolio standard that would encourage solar or wind power within their borders.
But Governor Haley Barbour, the former chairman of the Republican National Committee, is the driving force behind Mississippi’s efforts.
Mississippi has several appealing attributes for green manufacturers. The state’s corporate tax rate tops out at 5 percent and the state’s development authority will help to negotiate tax holidays. The loans to manufacturers often come with interest rates of around 4 percent; the state obtains the loans itself and passes the funds onto to the manufacturers without a premium.
Land and employees are also comparatively cheap. The average manufacturing salary in Mississippi is $33,000, Kathy Gelston, chief financial officer for the Mississippi Development Authority, said earlier this year.
Stion, a thin-film solar company that hopes to start producing modules in its Hattiesburg, Miss., factory next year, has committed to paying an average salary of $43,000. In arguing for its incentive package, Calisolar told the state that it would pay an average of $45,000 plus benefits, according to the Associated Press.
Those salaries are far higher than what a factory worker might make in China. Stion, however, needs far fewer employees because of the advanced nature of its manufacturing processes. A factory capable of producing 100 megawatts of crystalline silicon solar cells in China might require 1,000 employees, estimated Aaron Thurlow, vice president of global sales at Stion during a talk at Intersolar earlier this year. But because it has automated most of its processes, Stion only needs 200 employees for 100 megawatts of capacity.
Thurlow also noted that 59 percent of Stion’s materials and 73 percent of its tools came from American vendors.
Advanced manufacturing sits at the core of the strategies of the other companies moving to the South. Twin Creeks, for instance, is part of a small clutch of manufacturers that hopes to trim the cost of solar by reducing the thickness of solar cells by two-thirds or more.
Whether any of these companies succeed remains an open question. All but Soladigm are relatively young and have not commercially produced their products in large volumes. Soladigm, by contrast, has been promoting electrochromic windows which change tint with the weather since 1989. The cost and complexity have only recently been ironed out, its executives have said.
Calisolar, which says it has a technique to cut the cost of purifying silicon for solar cells, has experienced delays and had to adjust its strategy to counter some of the abrupt shifts in its markets.
State governments also have a long history of job creation efforts gone awry. In the ’90s, many of the industrial parks built for semiconductors remained empty. Evergreen Solar, a cutting-edge solar company from Massachusetts, recently declared Chapter 11 bankruptcy, as did Solyndra.
But at the moment, the Deep South is certainly attractive.