Solar Power Trip

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Members of the Greater Phoenix Economic Council traveled to Germany to encourage solar companies there to relocate to Arizona. Barry Broome of GPEC discusses the trip.

Ted Simons: Good evening, and welcome to "Horizon." I'm Ted Simons. The criminal case against county supervisor Don Stapley was officially dismissed today. Maricopa County superior court judge Kenneth Fields dropped all charges against Stapley at the request of the special prosecutor in the case. Those charges can be filed again. Stapley originally faced 118 counts related to financial disclosure forms, but about half of those counts were dropped last month because the county never properly implemented rules for financial disclosure. The rest of the charges were officially dropped today because they relied on those previously dismissed counts. In addition to all this, Stapley was arrested Monday on suspicion related to a campaign for president of a national county officials group. Prosecutors have yet to press charges in that case.
Representatives of the greater Phoenix economic council are in Germany this week encouraging solar companies to relocate to the valley. They no doubt are using Arizona's new renewable industry tax incentive bill as a major selling point. Here now to talk about the trip is Barry Broome, president and CEO of GPEC. Good to see you again.

Barry Broome: Good to see.

Ted Simons: You big world, why Germany?

Barry Broome: Well, Germany's been the world's leader in solar power for about 10 years. The solar industry in Germany is about eight times the size of the solar industry in the United States. They moved to renewable energy much more quickly, and the German government has a mandate for German companies to build presence in the United States. So it's a target-rich area, very competitive, but we're excited about the new initiative provided to us by the governor and the legislature. And we're in there making our case.

Ted Simons: What kind of companies are you talking to? Manufacturers, R &D, maybe moving headquarters?

Barry Broome: Yeah, a lot of North American headquarters. That's one of our big objectives on landing the North American headquarters. Gives you the greatest intellectual connection back to the company, keeps you in the loop with decision-makers. A lot of the thin-film manufacturers. There's a big move now on getting concentrated solar power projects in the ground in the valley, there's also going to be a need for people to build materials for those as well. So manufacturing and headquarters, a little R&D, but mostly on the manufacturing side.

Ted Simons: And what is your group telling the folks in Germany? How are they selling Arizona?

Barry Broome: Well, one of the great selling strengths of Arizona is the open environment for business, lack of regulations, and of course the tax environment is more favorable than less favorable. And of course with the incentives, the biggest problem we have a tax environment in Arizona is real and personal property taxes. These companies will have a reduction of 80% of that if they come in to Arizona, produce high-wage jobs, at 125% of the state's wage plus provide health care. So the ability to come into this market and get a cost environment that works, attraction a talent, and the ability to service the southwest corridor. Most of the solar activity in the United States, probably two-thirds is occurring in California. Arizona is is a great place to Service the California market.

Ted Simons: I was going to say proximity to California is always a factor, but what about other states in the southwest? How do we shape up against New Mexico, Colorado, these sorts of places, Oregon, which isn't in the southwest, but seems to be a major player. How are we differentiating ourselves?

Barry Broome: Right now the big differentiation strategy is the demand. As you hear more solar power installations announced in Arizona, we're trying to demonstrate that Arizona is a better place to produce a consumer market for solar than places like New Mexico, who are small, places like Oregon who can't do it. Now Texas obviously is very powerful, but they've seemed to put a greater emphasis on wind. So, the ability to create demand for the technology is really important, and that's the incentives that we've gotten from the legislature are much, much better, but they're not quite what Texas does and what Oregon does. But I think the combination of our incentives and our ability to produce the solar market long-term will be our selling strategy.

Ted Simons: As far as federal law is concerned, correct me if I'm wrong, but is there some sort of deal where renewables have to be manufactured here in the United States at a certain point, or what's that all about?

Barry Broome: Really there's the 30% investment tax credit. So the federal laws are pretty aggressive, in supporting renewables. There's also some discussion probably surfacing more with China. Another big pipeline to the Valley are Chinese manufacturers. Both an opportunity and concern. But the German companies are bringing in better wages, Spanish companies better wages, and some good activity starting to occur out of Japan too. So those markets, Spain and Germany, are projected to be a 25-30% renewable within five to eight years. So Arizona, the mountain west is the new market for the European companies, and it should be a good business opportunity.

Ted Simons: What kind of timetable? When can we start hearing noise about companies wanting to move here?

Barry Broome: I'm hoping -- the program is not officially available until January 1. So we're in a little bit of a timetable to actually get to commit to a transaction. But I'm hoping we'll have announcements in the first two quarters of 2010 about companies coming to Arizona and creating some excitement, badly needed jobs for our area.

Ted Simons: And Germany is nice, China looks like a whole different ball game, a lot of trips planned there?

Barry Broome: The concern we have-quite candidly- with China is Germany, Spain, Japan, they're really engineering intensive play, so these are good-paying jobs. We want to make sure China is not treating solar in Arizona as a commodities play. We don't want to have the chip making reunion of the Japanese strategy, the '80s where the Chinese government underwrites solar technology and comes in and puts it in our market below what American companies can do. So we're excited about the China relationship, but I think it's something we have to watch and make sure it's fair and equitable to our country.

Ted Simons: Barry, thanks for joining us.

Barry Broome: Thank you.

Barry Broome: Greater Phoenix Economic Council;

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