States Use Incentives to Attract Renewable Energy Business
As the economy recovers, one particularly bright spot will be manufacturing for the renewable energy industry, which is already enjoying healthy popular and government support.
Richard K. Greene, Senior Associate, Investment Consulting Associates (Nov 09)
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Augmenting With Traditional Incentive Programs
states, counties, and locales have programs that, though not
specifically targeting renewable energy company attraction, can be
applied to any incoming mobile investment. Where they exist, renewable
energy-specific programs may be combined with and augment traditional
• Empowerment Zones
• Work Opportunity Tax Credits
• Community Development Block Grants and loans
• Sales tax abatements
• R&D programs
• Employee search assistance
• Property search assistance
• Infrastructure preparation
can all be helpful when establishing a new facility, whether it be
headquarters, manufacturing plant, or research and development facility
in the renewable industry. A careful review of a state's full
incentives program mix will uncover the opportunities for programs that
can work together.
Incentives in Perspective
to say, companies must put incentives in their proper perspective among
other site selection criteria specific to the industry. A company must
carefully weigh the incentive opportunity with that of sound business
infrastructure that will feed the company's growth over years. Site
selection criteria specific to the renewables industry include:
• Market opportunity including cost of electricity and capacity shortfall;
• Infrastructure programs - federal and state governments' commitment to new grid distribution infrastructure;
• Availability of industry-specific work force, e.g., engineers, scientists, system integrators, etc.;
• Job training programs customizable to manufacturing process and management needs;
• Government policy for purchase of renewable energy and conservation programs;
• Presence of competition;
• Presence of system integrators;
• Renewable energy installation and generation incentives, which assist market growth;
• Utility programs for distributing "green" energy.
These criteria are in addition to the usual suspects that should always be a part of a balanced location search and include:
• Demographic growth trends;
• Availability and cost of labor;
• Availability and cost of land and property;
• Supplier logistics;
• Communications infrastructure;
• Quality-of-life issues.
criteria should be customized to the company and its specific activity,
prioritizing appropriately, since one size does not fit all. A variety
of techniques including company and investment assessments, comparative
location modeling, and cost analyses and cash flows are very useful in
narrowing the field and determining the best fit of finalist locations
in order to ensure they meet company requirements.
Incentives are part of the mix, and the analyses provide for successful negotiation and application.
Gearing Up for Recovery
the stock market reviving and an economic recovery under foot,
companies are preparing to initiate expansion strategy once again -
very welcome news. With government stimulus and growing popular
support, the renewables industry will be a bright spot of mobile
investment. States will continue to position themselves to capture
their fair share of projects and create jobs as they optimize programs
and extend expiration dates. The competition can only benefit the
industry as well as the served populace.
Greene advises on renewable energy strategy and programs for corporate
entities as part of location strategy, and with governments and
developers on opportunities for green urban renewal. He has worked
domestically and internationally with renewable energy companies on
location strategy and funding since 2000.