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Sanyo Electric opens new solar panel plant in Salem

By Amy Hsuan, The Oregonian

November 02, 2009, 8:29PM
solar.JPGSanyo solar panels are among the most efficient at capturing sunlight for electricity. The company utilizes a hybrid of two solar technologies to produce panels that can be used in extreme heat, cloudy weather and capture sunlight from both the top and the bottom. A Salem housing subdivision called Pringle Creek Community has already installed Sanyo panels, which are more expensive than other brands. At the entrance of Sanyo Electric Co.'s new Salem factory, an awning holds the secret to the company's competitive edge in an increasingly cutthroat industry.

Black solar cells between two panes of glass cover the front walkway. And on a dim Oregon morning, the solar panels can collect sunshine from both sides, making them more efficient -- and more expensive -- than other brands.

"Sanyo is the only company that has this technology," said Robert Zerner, a business development executive based in San Jose, Calif. "No one else has a cell that can gather sunlight on the top and the bottom."

Sanyo Electric Co.
Worldwide employment:
Annual sales:
$18.1 billion for the period ended March 31

In Oregon:
Sanyo Solar of Oregon, LLC

Salem employment:
200 by April
The differentiation is key for the Japanese electronics giant as it prepares to launch production at its new $80 million wafer plant, which opened Monday after nearly a year of construction. The factory employs 100 workers and expects to employ another 100 by April.

Sanyo Solar of Oregon -- as the local division is known -- represents a departure from other players in the state's growing solar industry, racing toward affordability to gain market share in a sector that's spawned hundreds of manufacturers worldwide. While other companies compete on price, Sanyo touts a unique and costly technology with a global manufacturing process that includes factories in Japan, Hungary and Mexico.

But the global recession continues to cloud the solar industry. Over the past year, prices have fallen by as much as 50 percent. And analysts predict many companies, particularly small and untested ones, will fail as prices continue to drop and profit margins shrink.

The state's investment in Sanyo -- nearly $45 million in government tax incentives and grants -- hinges on the company's success. Together, the subsidies total about $225,000 per job if the company employs 200.

"Focusing our efforts on clean technology even during these economic times is the right strategy for Oregon," Gov. Ted Kulongoski said at Monday's opening ceremony. "We are now competing globally for companies deciding to locate in new places and create jobs."

In Salem's 80-acre Renewable Energy and Technology Park, Sanyo's 130,000-square-foot factory houses the first two steps of solar manufacturing -- growing crystals and slicing them into wafers. From there, the wafers travel to Japan to be turned into cells, then to Hungary or Mexico to become finished panels.

By the time a Sanyo solar panel lands on a customer's rooftop, it will have made a lap around the world.

"We have a higher cost overall, but the performance benefit outweighs the cost," Zerner said. "You can put thousands and thousands of wafers in one pallet. They're really thin."

Sanyo North America -- the Sanyo Electric subsidiary that oversees the Oregon division -- intends to nearly double its solar panel production in Mexico and the United States by November 2010. Sanyo Electric, a leading manufacturer of rechargeable batteries, digital projectors, cameras and televisions, reported $18.1 billion in sales in 2009. The company has 86,100 employees worldwide.

The Oregon factory is critical to establishing a foothold in the solar market, said Mitsuru Homma, executive vice president of Sanyo Electric.

"Sanyo aims to be the leading company in environmental energy," said Homma, who traveled from Japan to tour the Salem plant. "We need to reduce the production cost closer to the cost of current energy generation."

In Salem, the company will pump out about 350,000 200-watt solar panels per year, with the potential to expand onto another 20 acres. This week, Sanyo also will be opening a new module assembly plant in Monterrey, Mexico.

Sanyo's combines two solar technologies, monocrystalline and thin-film. Zerner said this hybrid technology makes Sanyo panels among the most efficient, with about 25 percent better performance than SolarWorld, its German competitor. The Sanyo panels, which are also about 15 percent more expensive, are better for specific conditions, including extreme heat or cloudy skies.

At Pringle Creek Community, a green subdivision under construction in Salem, Sanyo panels have already been installed.

"It's good for residences in Oregon because you have limited space," said Alan Hickenbottom, president of Tanner Creek Energy, a commercial installer who often uses solar products from companies with factories in Oregon. "It's a beautiful panel."

Sanyo may never consolidate all of its manufacturing processes in one place, as SolarWorld is doing at its massive campus in Hillsboro.

The company worries about theft of its technology. By keeping cell production in Japan, the company hopes to protect its technology, spokesman Aaron Fowles said.

"In Japan, people are lifetime employees," Fowles said. "In the U.S., people switch employers a lot."

The growing competition in the industry also sparks rivalries between governments, hoping to land big companies and high-paying jobs.

To lure the company to Salem, city economic development officials threw in up to five years of property tax exemptions, which total about $1.2 million each year. Road and infrastructure improvements totaled about $1 million. Another $180,000 for a sewer and water connection fee waiver.

sanyo2.JPGA traditional kagami wari cask breaking ceremony was performed Monday at Sanyo Solar of Oregon's plant opening in Salem. From left are: Mitsuru Homma, executive vice president of Sanyo Electric Co., Salem Mayor Janet Taylor, Gov. Ted Kulongoski, and Tetsuhiro Maeda, general manager of Sanyo Solar division. Under the Business Energy Tax Credit program, Sanyo will receive $40 million in credits for creating 200 jobs, said Marc Zolton, of the Oregon Business Development Department. In addition, the company received $225,000 for workforce training.

Kulongoski said Monday more effort will be made to grow Oregon's solar industry, which has already resulted in high-paying jobs and promises an additional $100 million in investment in the coming months.

"We have the highest percentage of green energy jobs in the nation," Kulongoski said. "This growth is not by accident."

-- Amy Hsuan



 (31 total)     RSS
Oldest comments are shown first. Show newest comments first
Posted by Denny
November 02, 2009, 9:33PM

Who thinks this crazy stuff up? 225k per job....and the jobs pay what? What if they do not hire anyone? Sounds like they get the tax credit reguardless.

I find it quite ironic that a supposed school funding watchdog group, Stand for Children was trying to knock the stuffings out of bar and tavern owners who generate 1 million dollars a day to the state general fund.............and now we see this 40 million dollar gift. Where is the OEA Stand for Children gang on this one?

By the way, someone really should have given these solar investors a map.........the users will be in the sunbelt, if not for the largess of the short term gift, won't you all end up in CA, AZ and TX in the end. What a waste!

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Posted by lowdensity
November 03, 2009, 6:03AM

The only green in this project is, the 4$5 million that the taxpayers are paying for it!

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Posted by depittydawg
November 04, 2009, 4:13PM

Kudo's to Gov K. and the rest of the politicians who have enough vision to ignor the noise that comes from those whose vision is obstructed by the blinders of ideology. What you folks can't seem to realize is that the economic stimulus from a plant like this goes way beyond the 250 employees at the Sanyo site. The web of dollars begins with construction and includes MANY local contractors. Electricians, Plumbers, carpenters, sheet metal, laborers, local machine shops, vendors .... the list is quite deep. And frankly it never ends. The up keep on a plant this size requires the ongoing support from all the aformentioned interprises. Again,

Kudo's to our officials who have the vision to move the state forward, and the perserverence to ignor the mis-informed.

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Posted by supercitizen
November 02, 2009, 9:59PM

WOW. All I have to say is wow. Who in their right mind decided to give them a 40 million dollar tax credit for creating 200 jobs. Lets see, they get $225,000 per person hired, basically. At 50k per year, keep them "employed " for 4 years and then shut down due to competition. Not only do they get free workers, but they still make money on each one. If you don't think a big company would shut down a plant, just look at Hynix in Eugene. Over 1000 people gone, after this new plant ran for a few years.
Where can I apply for this tax break? I want 40 million to hire 200 people. Free workers for 4 years. WOW, and they want to raise taxes on small business???

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Tass Is Authorized To State
November 02, 2009, 10:13PM

Wow, the State paid for over half the cost of the plant.

The question is, are these state subsidies a one-time thing to get the plant started, or is Sanyo going to get them again and again?

I know which way I'd bet! Kulongoski Math!

Heck, give me 45 million buckos, and I'll start an earthworm farm that will employ 400 people! (For a year or two.)

"We have the highest percentage of green energy jobs in the nation," Kulongoski said. "This growth is not by accident."

...and our State's high unemployment rate isn't an accident either, Ted.

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Posted by coveredwagon
November 02, 2009, 10:38PM

Problem is, the tax money collected is a disincentive to more efficient business. Government economic decision making at its worst.


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Posted by iloveoregontoo
November 03, 2009, 12:05AM

All deference to our welcomed partners from Sanyo Electric (okage-sama de), my comments are directed at Gov K.

The cask breaking ceremony was unfortunately symbolic of the Oregon taxpayer getting soaked in the bargain. Gov K dishonor's our partners by his massive and corrupt misrepresentation of the Business Energy Tax Credit as reported by Harry Esteve, The Oregonian ( http://www.oregonlive.com/news/index.ssf/2009/10/state_lowballed_cost_of_green.html )

As reported in this article: "Under the Business Energy Tax Credit program, Sanyo will receive $40 million in credits for creating 200 jobs, said Marc Zolton, of the Oregon Business Development Department."

That totals roughly $200,000 per FTE.

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Posted by jdmd8910
November 03, 2009, 1:10AM

and to add more oil to the fire... not a single technology in the past 50 years has stayed put once it becomes a commodity. Yes, Sanyo will develop the commercial product on Oregon's dime, establish a market and distribution... and then move it to a low cost area in order to stay competitive. The "incentives" give away simply makes abandoning Oregon for a low cost site (eg: Northern Mexico) as predictable as rain in November, since Sanyo won't be leaving any of its own money behind...Stupid stupid stupid.

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Posted by uncleoxidant
November 03, 2009, 10:24AM

The problem is that Sanyo seems to be creating a very high-end, expensive product. It likely won't be viable in the marketplace for long. So what if the Sanyo cells give me 20% more output in the same area, if I can buy other cells (such as from nanosolar) at 1/2 the cost. I don't think many people will end up choosing the expensive Sanyo cells.

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Posted by maccormick
November 03, 2009, 4:16AM

This is a microcosm of what Obama is doing, so what's the beef? A job is a job. I don't understand all of this complaining...what are your SOLUTIONS for job creation?????????

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Posted by mammakatt
November 03, 2009, 5:28AM

Big IF here is if they hire the 20 people then the cost is $225,000 a job.

The article states they have concern about theft of their technology because American employees move from job to job so much. A large part of that movement is because employees are looking for better pay and the only way to get that is to move from company to company as thieir skills grow because too many employers do not pay employees that well.

They are getting 5 years of property tax reductions - will they stay after those 5 years or move to another location that will offer them new tax breaks. Oregon has a concern that too many come and get tax breaks and then leave when they expire.

Tax breaks should be proportional to the jobs they provide and the expected tax revenue of the business.

Oh wait - they may not pay much income tax either - unless the corporate tax increase passes.

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Posted by jwh2008
November 03, 2009, 6:03AM

My taxes go up by record amounts but this foreign country company gets 45 million in tax breaks while stupid ted runs American companies out of state one after another. Yet another great plan by this idiot governor and the lib legislature.

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Posted by notsanfran
November 03, 2009, 6:43AM

Where is the outrage? We need to unite and clean house these next couple of elections. What a mess.

Maccormick, you need to quit your government job an experience the real world.

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Posted by rst3a
November 03, 2009, 7:17AM

"Focusing our efforts on clean technology even during these economic
times is the right strategy for Oregon," Gov. Ted Kulongoski said at
Monday's opening ceremony. "We are now competing globally for companies deciding to locate in new places and create jobs."

How many times has the Gov been right about anything? and where did his crystal ball come from...ooh that's right he's receiving these visions in his dreams, because he is after all "sleepy ted"

Competing globally, did you mean buying jobs, at $225,000 per job? If there are 200 of them (probably never) will eventually break the state. Spending more tax dollars on "yugo" jobs is not competing. Ted... to use maybe the only analogy that you'll understand, to compete in bowling, you need to knock more pins down than the other guy. You don't win by spending more money at the concession stand.

Solar panels will end up as they did in the 1970's ... ugly, dysfunctional, pieces of glass to dispose of at the end of this cycle of insanity.

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Posted by tim318
November 03, 2009, 7:25AM

We know what a "green tech" job is worth to the state of Oregon....$225,000.

We know what an existing, manufacturing job (mill, factory, etc.) is to the state....nothing.

Here's the irony, this Sanyo plant opens with the prospect of 200 jobs. In Albany, International Paper mill is closing after 55 years of use with a loss of 270 jobs. Maybe we could work on saving jobs that we already have.

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Posted by localfella
November 03, 2009, 7:36AM

We are sitting on vast amounts of Nat Gas that can fuel our needs and can keep us warm on a windless and foggy days.

Meanwhile, Europe is going for Fuel Cells that run on Nat Gas, they don't have.

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Posted by blackotter1
November 03, 2009, 7:37AM

it's the way manufacturing operates. if you want a plant in your city or state you pay for it. look at what sc gave to boeing to open up an assembly line. you are the same folks who moan and castigate state government when a proposed plant decides to locate in alabama instead of oregon or washington. you want the jobs you woo.

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November 06, 2009, 7:51PM

how make a solar panel

wow... found it interesting... hope it'll be beneficial for me and my friends...

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Posted by barack666
November 03, 2009, 8:06AM

Connect the dots with this story and from this past weekend:

State lowballed cost of green tax breaks
By Harry Esteve, The Oregonian
October 31, 2009, 7:32PM

Corrupt actions from Gov. Kulongoski. AG/State Ethics Commission needs to investigate.

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Posted by coveredwagon
November 03, 2009, 8:19AM

" growing crystals and slicing them into wafers. From there, the wafers travel to Japan to be turned into cells, then to Hungary or Mexico to become finished panels.

By the time a Sanyo solar panel lands on a customer's rooftop, it will have made a lap around the world. "

Would someone more knowledgeable and smarter than I please explain the sustainable economics here - how is this "green"?

Chips made in a plant in Oregon shipped around the world, with a stop in Japan for secret and proprietary valued added manufacturing. At the end of the day, is the oil burned in transportation less than using local materials and labor to insulate your home better?

A big photo op and a few new expensive jobs, and all is forgotten, except you put a bunch of "small is beautiful" local businesses out of work while you were collecting and spending our tax money.

If this project could have stood on its own economic legs, with a state subsidy, it would be happening anyway.


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