PHOENIX (AP) — Gov. Jan Brewer on Monday announced plans for a Chinese-owned solar panel maker to build its U.S. headquarters and a manufacturing plant in the Phoenix area, propelling one of the nation's sunniest states toward a bigger global presence in the renewable energy industry.
Suntech Power Holdings Co. said it expects to start building photovoltaic panels at the facility by the third quarter of 2010. The company, which has more than 9,000 employees, expects to eventually employ 250 or more people at the plant.
Suntech said it selected the Phoenix area because of Arizona's leadership in solar research through Arizona State University and statewide renewable energy policies. The company plans to decide on the precise location of the plant in the coming weeks.
The first phase of Suntech's 100,000-square-foot facility will bring a $13 million investment and 125 jobs, the governor said. If the company's investment grows to at least $25 million, it will qualify for property tax reductions as part of the state's Renewable Energy Tax Incentive program.
"It's an example of how an investment can work and be fiscally responsible," said Barry Broome, president of the Greater Arizona Economic Council. "This is a company that's capable of creating thousands of jobs in a state like Arizona."
Brewer said a majority of the jobs would be high-paying positions with health care coverage.
"Trust me, they are not going to be the last ones," she said. "We are building what I believe is a very diverse and sustainable Arizona economy."
Suntech Chairman and CEO Dr. Zhengrong Shi said setting up in Arizona is the first step in a long-term, strategic investment in the North American market.
"The leadership shown by the US government in advancing renewable energy will only improve the environment for further investments in the coming years," Shi said.
He said locating the plant close to Suntech's U.S. customers will reduce the time, costs, and emissions associated with shipping solar panels.
"Bringing manufacturing jobs to the U.S. is part of Suntech's vision to grow the solar market in every corner of the world," Shi said. "We are eagerly watching growing markets and see the potential of bringing manufacturing capabilities to other markets where we see the combination of rapid local market growth and manufacturing cost competitiveness."
Broome said Suntech timed its announcement to coincide with President Barack Obama's visit to China.
"They wanted to send a message that they are going to invest in the United States," he said.
Mark Bachman, a senior research analyst with Pacific Crest Securities, said the project doesn't necessarily give Arizona an edge over other states in the renewable energy industry.
With the capacity to make 30 megawatts of solar panels per year, the Arizona facility would represent about 3 percent of Suntech's total production, Bachman said.
"They want to appear to be manufacturing here domestically so when the solar market takes off in the U.S., they have room to stand on and say, 'We are producing jobs here and we want to be able to sell our panels here as well,'" Bachman said.
Suntech's U.S. shares climbed $1.65, or 12 percent, to $15.37 on Monday.