It’s hard to say that our solar manufacturing jobs have been outsourced because most of them were never here in the first place. That is because other countries, such as Spain, Denmark, Germany, and even the Philippines offer tax breaks and incentives for manufacturers that current U.S. incentives cannot compete with.

While the renewable energy industry is creating jobs in the U.S. as opposed to cutting them, which seemingly every other major industry is doing, there could be many more. In speaking to CNN, SunPower spokeswoman Julie Blunden (SunPower recently opened a manufacturing plant in the Philippines) revealed that “[SunPower] would love to…invest in our own backyard, but the tax packages offered in the Philippines are difficult to compete with.” Of course lower wages are also an important factor for companies such as SunPower.

When President Reagan eliminated previous solar tax credits, the industry arguably disappeared for nearly 20 years. Largely as a result of the new energy crisis that hit at the start of the new millennium, tax credits were implemented once again, a move that sent a rejuvenated solar industry sky high; and there it flies to this day. For further and more recent evidence, one need only look at the trepidation that surrounded the solar industry prior to the current credits’ last minute renewal and revision in October of last year.

Still, the current credits do not include direct incentives for manufacturers of solar panels and other renewable energy products and equipment. Today’s credits focus on power producers — utilities, power plant operators, etc. — and largely ignore manufacturers. The general consensus seems to be that heightened production will spur more manufacturing…and it does, just not necessarily here in the United States.

There is stateside evidence for the success of such tax credits however. The state of Oregon, led by Governor Ted Kulongoski, passed the Business Energy Tax Credit in 2007, providing incentives directly to manufacturers. That move single-handedly inspired German-based company, SolarWorld, to open a 500 MW manufacturing plant in Hillsboro, just west of Portland. Six other solar manufacturing companies have set up shop in Oregon as well, bringing at least 2,000 high-wage jobs to the state.

Now this is just one state. Imagine what federal tax credits geared directly at solar manufacturers could achieve. Judging by the quick response that Oregon received, manufacturing credits could provide valuable help in the short-term when the country needs it most.

photo credit: SunPower

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Posted on February 17th in Solar Politics by Dan.