Renewable energy bill will help bring jobs to Yuma

Since 2007, Arizona has lost out on more than 4,000 high-wage alternative energy manufacturing jobs and approximately $2.3 billion in investment (AzRISE 2008 estimates) to more competitive, renewable energy friendly states.

In an economic climate where unemployment rates continue to scale upwards throughout the state, it is more imperative than ever that we seek to diversify our base industries.

In the last 24 months, the activity and interest within the solar industry has soared. What once was a technology that was too expensive to implement on a residential scale and not cost effective from a commercial standpoint has now become attainable through multiple federal-, state- and utility-sponsored incentive programs.

Most importantly the eight-year extension of the U.S. Investment Tax Credit Bill (30 percent tax credit offset on any renewable energy installation) through 2014, provided the monetary incentive necessary to "Go Green" for homeowners, utility companies and businesses alike.

On June 26, the Arizona State House of Representatives approved Senate Bill 1403 or The Quality Jobs Through Renewable Energy Industries Program. The program is designed to stimulate new investment in manufacturing and headquarter operations of in-state and out-of-state renewable energy companies, including: solar, wind, biofuel, geothermal and other alternative clean energy technologies.

The work to get the bill passed was a collective statewide effort by all the economic development communities imploring the Legislature to help us realize the immense job creation and capital investment potential the renewable industry has to offer.

Under the stipulations of the program, companies that meet specific job-to-capital investment requirements would qualify for a 10 percent income tax credit (transferable to Arizona enterprises with tax liability) spread equally over five years. Also, projects that involve at a minimum $25 million capital investment would be eligible for reduced real and personal property taxes at the discretion of the community where the project is located.

The reclassification of the property taxes would be determined by the wage range offered by the employer, which would result in either a 10- or 15-year term. To ensure the integrity of the company receiving these benefits, each recipient would undergo a review process administered by the Arizona Department of Commerce and Arizona Department of Revenue conjunctively.

The program would go into effect Jan. 1, 2010, and sunset on Dec. 31, 2014. If a firm did not maintain any of the parameters within the incentive agreement, claw-back provisions are embedded in the contract to cease future benefits or reclaim benefits paid out in full.

So, how will Yuma directly benefit from this legislation? The current state of affairs at the Capitol is a lesson that we no longer can rely on construction and retail sales to fuel our economic engine. The institution of SB 1403 has put Arizona, and Yuma in particular, on an even playing field with competitor states such as New Mexico, Texas and Oregon.

Currently, we are working with two potential company locates that were monitoring this bill very closely. Their project scope estimates may account for 200+ high-wage jobs and approximately $50 million to $75 million in new capital investment.

From an economic development perspective, solar manufacturing companies that need to have a presence near large consumers of their products such as California are now focused specifically on communities that can provide the available labor force, shortest time to end markets and up-front capital cost offsets. Leveraging the presence of three large-scale solar farms developing projects in our county, California’s ravenous appetite for clean energy and our distinct regional advantages; we have the potential to become the epicenter for solar activity in the desert Southwest.

With a new tool under our belt, the Greater Yuma Economic Development Corp. has identified specific industries within the solar sector that we will pursue aggressively with our new marketing strategy and incentive program. Our presence will be felt at international solar conferences, trade shows and direct company contact. In the upcoming month, we will be announcing a progressive company outreach strategy that will focus on renewable energy along with other key industries.

Our organization with the support of our investors understands the window of opportunity for new job creation within the renewable energy sectors is upon us and we will utilize every competitive asset we have to strengthen our regional economy.

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Greg LaVann is project manager for the Greater Yuma Economic Development Corp. He can be reached at 782-7774.