March 18, 2010:
- Austin Approves Development Agreement for Chinese Solar Manufacturer
On a 7-0 vote, the Austin City Council last week approved a 10-year economic
development agreement with Yingli, a Chinese manufacturer of solar panels. Austin is competing with Phoenix, which is also offering a series of economic incentives to lure the manufacturer to open its first plant in the US. Yingli's parent company is the largest vertically integrated manufacturer of crystalline silicon photovoltaic panels in the word.
In approving the agreement, Austin Mayor Lee Leffingwell and other Council members stressed that attracting the manufacturer would serve to create a new
economic sector in Austin centered around solar power. Austin is already home
to Heliovolt (a building integrated solar manufacturer), Applied Materials (which builds the machinery needed to assemble solar panels) and some 30 companies that install solar panels.
Under the terms of the economic development agreement, Yingli would open a solar assembly/manufacturing facility in Austin, commit to hiring 303 workers by the end of 2012, pay them an average salary of approximately $33,500 per year, and comply with local ordinances, including Austin’s water quality ordinance. In return, a full 80% of city property taxes would be forgiven, worth an estimated $354,561 over the course of the 10 years.
The majority of the speakers – including representatives of the Austin Sierra Club Group, Applied Materials, solar installation companies, and the Hispanic, Asian, African-American, and Austin Chambers of Commerce – spoke in favor of the agreement, while Austin Interfaith spoke against the agreement because of the lack of a “livable wage” contained within the agreement. While acknowledging the lack of a specific livable wage, City Council members Randi Shade and Laura Morrison stressed that the company was making commitments to provide rebates to workers to increase training and education and that the expected average wage – at approximately $13.50 per hour – was significantly higher than in
previous agreements approved by City Council.
The Lone Star Chapter of the Sierra Club spoke about its desire for Yingli to locate in Austin and the many opportunities to increase solar manufacturing in Texas, but also called for improving the agreement by providing:
* an average and minimum wage;
* a clawback provision should the manufacturer fail to meet its promises; and
* some environmental performance commitments for compliance and
energy and water use.
While none of these suggestions were adopted by City Council, Councilmember Morrison encouraged the manufacturer to work with the Sierra Club to assure commitments to these areas.
With the Austin agreement in hand, Yingli is also seeking incentives from the Texas Enterprise Fund, which is overseen by Governor Rick Perry’s office, and other funds available for manufacturers through the American Recovery and Reinvestment Act.
If Yingli were to ultimately locate in Austin, it would reverse a disturbing trend of solar manufacturing companies choosing other states like Arizona, Michigan and New Mexico over Texas, due in part to the failure of the Texas Enterprise Fund and Emerging Technology Fund to offer incentives to these companies.
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