Bloomberg News

Solaria Considers Tax Break in California Expansion

September 30, 2011

(Corrects that company may build a new plant outside California in first paragraph of story published yesterday.)

Sept. 29 (Bloomberg) -- Solaria Corp., a U.S. solar-panel manufacturer, may decide to build a second factory outside California as the state reconsiders a program that gave bankrupt Solyndra LLC a $25.1 million tax break.

In April, Solaria opened a solar-panel manufacturing plant in Fremont, the same city where Solyndra built its now-shuttered factory. The possibility of building a second panel plant in California may be derailed without the tax break, said David Hochschild, a Solaria spokesman.

“That will be one of the factors that we’ll be looking at,” Hochschild said today on a conference call with reporters. “I don’t think the California government wants to cede their leadership.”

California Treasurer Bill Lockyer asked state officials this week to suspend and review additional sales-tax exemptions for renewable-energy manufacturing equipment. About $31.4 million in taxes have been waived under the law, according to data on the treasurer’s website, and would amount to about $104 million over a three-year period that started last year.

The pause is intended to protect taxpayers and improve the program, Tom Dresslar, a spokesman for Lockyer, said today in an e-mailed statement.

“The treasurer is not suggesting this tax break be ended,” Dresslar said. “He strongly supports development of the solar industry in California.”

Tax Breaks

Under a 2010 law, the state Alternative Energy and Advanced Transportation Financing Authority can exempt sales taxes on equipment, the building or assembly of alternative-energy manufacturing and landfill-gas plants. The authority plans to vote on suspending the program on Oct. 25.

Solaria, which has hired workers dismissed by Solyndra when that plant closed on Aug. 31, has received $122,667 in tax waivers through Sept. 1, out of as much as $709,800 in exemptions granted under the program over three years for their factory in Fremont.

Bloom Energy Corp., a fuel-cell maker, and Tempe, Arizona- based First Solar Inc. have also benefited from the tax break.

--With assistance from {Michael B. Marois} in Sacramento. Editors: Charles Siler, Ted Bunker

To contact the reporters on this story: {Christopher Martin} in New York at cmartin11@bloomberg.net; {Mark Chediak} in San Francisco at mchediak@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net


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