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Inward Investment Guides

California: Alternative Energy Programs Offer Promising Possibilities for Recovery

Mali R. Schantz-Feld (Dec/Jan 10)
Governor Arnold Schwarzenegger's philosophy for saving and creating jobs in California's promising industries is centered on quick and responsible allocation of American Recovery and Reinvestment Act funding and implementation of state incentives.

In the state's signature industry, film and television, 36 productions were scheduled for the last quarter of 2009 as a direct result of California's film and TV production incentive, passed by the state legislature in February. While most productions are scheduled for the Los Angeles area, activity is also staged in Fresno, Kern, San Francisco, Orange, Riverside, and San Bernardino Counties.


With his state boasting the largest green economy in America, with $6.5 billion in venture capital investment in the last three years, Schwarzenegger enthusiastically supports green-energy legislation. California Alternative Energy and Advanced Transportation Financing Authority's (CAEATFA) recent agreement with Tesla Motors waives the sales tax on investment in new manufacturing equipment for Zero Emission Vehicles for electric car manufacturing in the state. CAEATFA will assume title of $320 million worth of manufacturing equipment purchased by Tesla directly from vendors so Tesla does not have to pay the sales tax. When the transactions are completed, CAEATFA will transfer title of the equipment to Tesla. The equipment purchases will be steered to establish a production facility for Tesla's Model S sedan, upgrade its Palo Alto powertrain production facility, and expand the current Roadster assembly facility at Menlo Park.

Alternative fuel vehicle pioneer Electric Vehicles International (EVI) - formerly headquartered in Toluca, Mexico, with a sales and marketing office in Austin, Texas - is moving its world headquarters and primary manufacturing facility to the city of Stockton. State policies and programs that contributed to the relocation decision include greenhouse gas law AB 32, the low-carbon fuel standard incentive programs, and the number of diesel trucks that seek reliable, affordable, zero emission.

"EVI has chosen California as their place of business for the very positive environment," says Ricky Hanna, CEO of EVI USA. "The Californian government provides for companies who, like EVI, produce and offer green, clean products. EVI looks forward to working closely with the California Energy Commission in respect to R&D and manufacturing grant monies under AB118 and AB32. Qualifying for grant funds will accelerate our hiring and manufacturing, ramp up plans, and enable us to develop more vehicles such as fully electric school buses." Hanna says EVI is also working closely with state agencies on incremental cost incentives for alternative fuel vehicles for the California marketplace. The company will design and assemble zero-emissions, all-electric, medium-duty delivery vehicles and light-duty vehicles, all using EVI electric motors and controllers manufactured in Stockton.

The state is also working towards a sunny future for the solar sector. Fremont-based Solyndra Inc., manufacturer of cylindrical solar photovoltaic panels, is planning construction of the first phase of a new manufacturing facility, expected to create 3,000 construction jobs and eventually employ approximately 1,000 direct and indirect workers. Solyndra is the first company to receive a loan guaranteed by the U.S. Department of Energy under Title XVII of the Energy Policy Act of 2005. The $535 million loan from the U.S. Treasury, combined with $198 million from equity financing, is providing the capital required for the project.


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