Plant Closure Sparks Incentives Debate in MA
Evergreen Solar’s recent decision to close its Devens, MA solar panel manufacturing plant and move production to China after receiving more than $50 million in state aid has sparked calls from Massachusetts legislators for changes in the state’s economic development incentives program.
According to a report in the Worcester Business Journal, State Rep. Harold Naughton of Clinton, MA said this week that state needs more stringent “claw back” provisions to be able to collect money that is given out to businesses if they don’t live up to requirements when receiving state funds.
Naughton participated in a panel of state legislators who spoke at a Corridor Nine Area Chamber of Commerce breakfast in Westborough, MA.
Evergreen reportedly received about $56 million in state aid, but state officials have said the total cost of that investment to taxpayers will end up being about $18 million.
State Sen. Harriet Chandler, D-Worcester, told the panel incentives are important for attracting and retaining businesses, the WBJ reported. “I think we just have to be more careful,” she said. “Let’s not throw out the baby with the bath water.”
With state support, Evergreen Solar blossomed in the past three years to become the third-largest maker of solar panels in the United States. Earlier this month, Evergreen Solar announced it will close its factory in Devens, MA and lay off the plant’s 800 workers by the end of March. The company also announced it has formed a joint venture with a Chinese company and will shift production of its solar panels to a plant in central China. The New York Times reported that a key factor in Evergreen Solar’s decision was “much higher government support” available for alternative energy initiatives in China.
The Obama Administration says it is investigating whether mammoth subsidies China has bestowed on its burgeoning alternative energy industry violate the free trade rules China accepted when it joined the World Trade Organization. China’s annual investment in alt energy now tops $50 billion, far outpacing all other nations and about $20 billion more than the amount invested by the United States.
China’s mass production of solar panels for export have caused a two-thirds drop in the price of panels. Evergreen Solar CEO Michael El-Hillow told the Times the plunge in solar panel prices and the subsidized cost advantage enjoyed by Chinese manufacturers essentially forced him to move his production to China.