The investment and the incentives
The case concerns the establishment of a manufacturing facility in the US to produce photovoltaic
products aimed at solar power plants for large-scale utilities, an investment amounting to approx.
USD 150 million. The EU company received a USD 25 million SUNPATH award (grant) from the
US DoE. SUNPATH, which stands for Scaling Up Nascent PV At Home, seeks to increase
America’s manufacturing competitiveness in the global solar market.
Decisive factors for the choice of location
The main factors that were decisive for the investment decision were listed by the company as
follows:
Reason 1: Public incentives available to the company’s customers create a market for its products.
The main customer group for the products produced at the new facility are energy utilities investing
in large-scale solar farms. There is an incentive system in the US state where the investment is
located, to push for increased use of solar energy. This includes an obligation on utilities to base
35% of their production on renewable energy by 2020. In addition, utilities get a 30% tax credit for
electricity generated as renewable energy, which means that they can sell such energy at a
competitive market price (since solar energy is more expensive to produce than conventional
energy). This creates a demand for large-scale solar farms by energy utilities.
Reason 2: Incentives provided to the investing company – both targeted and general. The main
incentive was the USD 25 million grant targeted at keeping manufacturing in the US. The company