DENVER – In October 2011, Colorado Gov. John Hickenlooper and U.S. Sen. Michael Bennet participated in a press conference with General Electric executives to promote a new $300 million solar energy panel plant in Aurora that was supposed to be the country’s largest solar factory.
“It’s like planting a seed,” said Hickenlooper, after courting and winning the deal in 2011. “It will benefit the whole region.”
GE announced this week that the deal is off – despite having been offered more than $22 million in incentives by Colorado – because the solar panel market is saturated, demand and prices are down and it’s not cost effective to expand in the state.
Hickenlooper was silent this week when GE pulled the plug on the solar plant which was to have employed 350 Coloradans at a starting wage of $50,000 a year. GE also announced the closure of its Arvada-based research center – putting 50 people out of work.
Instead of moving forward in Colorado, GE made a deal with Tempe, Arizona-based U.S. Solar Panel, Inc. which will obtain the technology developed at the research center in Arvada which GE acquired from PrimeStar in 2009.
The Governor’s Office of Economic Development and International Trade had offered GE an incentive package but the details weren’t available on their website. The incentives would have been paid after the Aurora plant was built and hires were made.
Aurora had offered $20 million in tax rebates on manufacturing equipment and sales taxes, and Adams County had promised a $2 million subsidy for job training to GE.
“GE has been a good partner and has kept us informed,” OEDIT Director Ken Lund told the Denver Post. “It was a business decision, but it’s disappointing.”
But, the news of GE abandoning the state might not be a surprise to Hickenlooper or deal insiders.
A year after their press conference with GE, the company postponed the Aurora plant for 18 months to reassess the economic climate for solar panels.
In 2011, at least three solar panel manufacturers, none bigger than Solyndra in California, had filed for bankruptcy. In July 2012, Loveland-based Abound Solar also filed for bankruptcy. All had received government subsidies – the federal tax credit for solar energy development continues through 2016.
Abound Solar, for which the federal government authorized a $400 million loan guarantee, blamed its financial demise on low-cost products produced in China.
But, there were numerous reports that American solar panel manufacturers, including Abound, produced defective solar panels with a short-lived function span.
How bad is the market? Suntech, the largest solar panel producer in the world, has filed for bankruptcy. The company, headquartered in China, defaulted on a $541 million United States bond payment in March.