Suntech Power: new factory site in Arizona

According to development officials of US state Arizona, Chinese solar-panel maker Suntech Power Holdings Co. has chosen Goodyear to house its new factory.
Barry Broome, president and CEO of the Great…

According to development officials of US state Arizona, Chinese solar-panel maker Suntech Power Holdings Co. has chosen Goodyear to house its new factory. Barry Broome, president and CEO of the Greater Phoenix Economic Council, added that at least 54 renewable-energy companies are considering the region for possible factory sites. Suntech was attracted to Arizona also thanks to the tax breaks passed by the Legislature and signed by the governor in 2009, offering renewable-energy equipment factories income-tax credits and lower property taxes according to how much they invest in their factories and what they pay their workers. According to Broome, Suntech could therefore be eligible for USD 1 million to USD 1.5 million in state tax breaks based on its plans, and, even if the investment is not large enough to trigger reduced property taxes, Suntech will also receive a USD 500,000 credit for job training from Goodyear. Moreover, Suntech also could get a USD 2.1 million federal tax credit from its investment in the Arizona facility. A recent report from the US Department of Energy also states that five other companies could get federal tax credits for new or expanded factories in Arizona. The new companies considering factory sites include suppliers for Suntech and Michigan-based Tower Automotive, with plans for a USD 50 million solar-component factory in the area, Broome said. Suntech expects to spend from USD 10 million to USD 15 million on a solar panel assembly factory in an existing building in Goodyear that it will lease, officials said. This factory will initially employ 75 people and have an annual production of solar panels a year – enough to power about 7,500 residential homes. The plant will then be expanded to over time to four times that capacity, employing 250 people. Steven Chan, chief strategy officer said that the Arizona Suntech factory, which will have an initial capacity of 30 megawatts, with 120 megawatts of capacity if and when it expands, is scheduled to start production by September 2010, enabling the company to serve the Southwest with panels made in the US. Chan added that Suntech will work to match the cost efficiencies of its factories in China because even if customers want a domestically produced product, price is more important to US consumers. “US customers are not willing to pay more for something made in the US,” he said. Workers at the new factory will assemble the pre-made cells with glass and frames into the panels used on roofs and in large fields for power plants, while the processing of silicon wafers into silicon solar cells will not take place. Suntech“s existing factories produced 498 megawatts of solar panels in 2008, mostly aimed at the European market.