Washington: the new Sunshine State?

Robust global demand for solar energy has some of Washington’s major manufacturing companies considering big expansion plans. It remains to be seen, however, whether a pair of much-touted state laws is enough to attract new solar-electric companies from outside of Washington.

Key challenges facing the Evergreen State are a global scarcity of solar-grade silicon and stiff recruiting competition from other states and countries. So in the near term, industry experts say big companies with an existing manufacturing presence in Washington and start-ups appear poised to benefit from the laws the most.

In spring 2005, Gov. Christine Gregoire signed into law Senate Bills 5101 and 5111, aimed at helping the state capitalize on the booming global solar energy market by addressing supply and demand.

On the demand side, SB 5101 provides Washington businesses and homes with a base credit of 15 cents per kilowatt-hour of electricity generated from photovoltaic (PV) systems. If the systems’ components are manufactured in Washington, the credit is multiplied to as much as 54 cents, up to $2,000 annually.

On the supply side, SB 5111 provides a 40 percent reduction of the state’s business and occupation tax for manufacturers and wholesale marketers of solar PV modules or silicon components of those systems. Manufacturers that already reside in the state or choose to relocate there are eligible for the reduced tax rate.

Moses Lake-based Solar Grade Silicon LLC, which last year produced about 2,300 metric tons of polycrystalline silicon for solar applications, hopes to triple its manufacturing capacity to meet global industry demand growing by about 35 percent annually.