Tax Credits Attract Solar Company to Oregon

By Libby Tucker

Oregon’s business energy tax credit was the driving force behind SolarWorld AG’s decision to locate a solar panel manufacturing plant in this state, corporate officers and state officials said.

The solar silicon wafer and solar cell producer, headquartered in Germany, announced last week that it had purchased the vacant Komatsu Silicon America semiconductor plant in Hillsboro for $40 million.

“The business energy tax credits themselves were a significant factor” in SolarWorld’s decision to locate in Oregon, Jake Weigler, a spokesman for Gov. Ted Kulongoski, said. “We’re really happy they can come here and be part of our renewable energy sector.”

Under the state’s business energy tax credit, the facility could benefit from a renewable energy tax credit worth 35 percent of eligible project costs. The facility could also take advantage of a legislative proposal passed by the Oregon House of Representatives last week that would increase the business energy tax credit to 50 percent of eligible costs.

The bill would be retroactive to Jan. 1, 2007, making the SolarWorld plant eligible for up to $20 million in income tax credits, Weigler said.

“It’s good to hear if it passes and makes it even more attractive for us to invest as quickly as possible to expand our operations in Oregon,” said Boris Klebensberger, SolarWorld’s chief operating officer.

The bargain price – 10 percent of the approximately $400 million Komatsu spent to build the plant – “perfect” factory setup and proximity to a mature industry cluster of semiconductor companies in Oregon also influenced SolarWorld’s decision, Klebensberger said.

SolarWorld will consolidate two existing West Coast locations, in Vancouver, Wash., and Camarillo, Calif., into one location in Oregon. The facility will undergo a $400 million expansion to become the largest solar panel production plant in the United States, capable of manufacturing solar panels that will collectively produce 500 megawatts of electricity each year, or enough electricity to power 500,000 homes.

SolarWorld is the first large renewable energy company to announce its plans to move to the state since business leaders and state officials decided in January at the Oregon Business Summit to focus the state’s economic development strategy on sustainable industries.

“I think Oregon is trying to establish ourselves … as an earth- friendly state and one that welcomes businesses such as this, and (the business energy tax credit) is one way of putting out the welcome mat,” said Rep. Vicki Berger (R-Salem), a sponsor of the bill. “We really value and encourage these types of manufacturing facilities to come and locate in our state.”

The increase in tax incentives was “precipitated” by House Bill 2210, which would provide tax incentives for biofuels producers, Berger said. But the bill “applies to any number of these kinds of businesses or enterprises that deal in renewables,” she said upon learning of the solar company’s purchase, so SolarWorld could benefit.

(c) 2007 Daily Journal of Commerce (Portland, OR). Provided by ProQuest Information and Learning. All rights Reserved.