First Solar made a splash announcing 600 jobs at a new Mesa factory, but Thursday's news may prove to be just the beginning.
The photo voltaic plant could expand to employ 5,000 and become a magnet for related companies that would make the Valley a worldwide leader in solar energy and research.
Tempe-based First Solar has become the nation's largest photo voltaic manufacturer and its explosive growth will force Arizona to take notice of the industry's economic power, said Barry Broome, the president and CEO of the Greater Phoenix Economic Council. He sees the new jobs at a $323 million plant as tiny compared with what it has the potential to trigger.
"In some ways that's the least significant part of this announcement," Broome said. "The most significant part of this announcement is that solar is the future of Arizona and if you're going to be a leader in Arizona, you've got to be committed to making solar work in our state. And if it does, it's going to change our state and the world."
The plant will make 250 megawatts of panels a year. That will double the company's annual capacity.
First Solar chose Mesa after searching 40 sites worldwide, CEO Robert Gillette said. The U.S. is now the company's fastest-growing market and First Solar wanted to make panels where its customers are.
One destination for the panels is near Yuma, where the Agua Caliente Solar Project will become the world's largest solar-generating site when completed. Demand for solar continues to rise as fossil fuel prices rise and Japan's nuclear crisis is raising concerns over atomic energy. Solar accounts for less than 0.5 percent of all energy production but it's becoming more attractive as it grows cheaper.
"It's not a replacement for some of these core generating technologies but it certainly is something that we think will grow over time and be a much larger contributor to power generation," Gillette said.
First Solar projects the cost will drop to 0.52 cents to 0.60 cents per watt in 2014, which he said puts it on parity with other sources.
Mesa faced steep competition from several states, including some in the south that would take on First Solar's debt to construct the plant, Broome said.
The factory will go on 135 acres at Signal Butte and Elliot, where First Solar has an option on an additional 100 acres of the former General Motors Proving Grounds. This is the first development on land now owned by Scottsdale-based DMB Associates.
The site allows construction to begin almost immediately, which Mayor Scott Smith said was one key factor in landing First Solar. The other is the Valley's educated work force, Smith said as he alluded to deep cuts the Legislature is considering to K-12, community colleges and universities. He warned Arizona is at risk of losing out on future jobs.
"As we go through the debates down in the state Capitol, I hope that we understand that on the front end, policies - tax reductions - get people in the door," Smith said. "To ensure long-term success, we cannot cut - pull the rug out from under our educational institutions (and) our cities. If we are challenged in providing these basic services, if we cannot provide the type of educated workforce, all the tax policies in the world will not create a winning solution."
Smith spoke at an event just minutes after Gov. Jan Brewer said the new Arizona Commerce Authority and economic incentives were key to the deal.
"These are the policies that support innovation, reward investment and minimize government intervention and encourage productivity," she said.
First Solar estimates construction will take one year and that it will produce panels in the third quarter of 2012. About 400-500 construction jobs will result.
State incentives will reduce First Solar's real estate and personal property taxes by 80 percent for 10 years, and Maricopa County will fund some training programs. Mesa will construct up to $10 million in infrastructure that was already planned in the area for projects like this and the proposed Gaylord Resort.