To call July 31 a sunny day for Utah’s economy would be both a terrible pun and a terrific understatement.
A pair of solar-power companies announced that day that they would expand or bring operations to the state, adding a total of more than 7,100 jobs over the next decade.
The announcements were made after the companies were approved for tax rebate incentives by the Governor’s Office of Economic Development (GOED) board.
SolarCity will put a regional administrative corporate headquarters in either Draper or Lehi and add 4,000 jobs. Vivint Solar will expand at its current Lehi headquarters, adding 3,143 jobs to its current Utah employee total of about 1,200.
“This is a very exciting day for the state of Utah, with the two largest commercial and residential solar companies now in the state,” said GOED board chairman Mel Lavitt.
To put the incentives in perspective, Theresa Foxley, GOED’s managing director of corporate recruitment and business services, said either one of the projects would represent GOED’s largest-ever incentivized project, based on the number of expected new jobs. Also, in the July 31 meeting, GOED topped the 5,600 incentivized jobs approved during the entire most recent fiscal year.
Also for comparison, in June 2011, ITT Exelis was approved for a nearly $33.7 million incentive tied to the creation of about 2,700 jobs over 15 years.
“Really, we’re doing back flips here in the room,” Foxley said to the people participating in the board meeting via conference call after the two incentives were approved.
“We’re incredibly excited about the opportunity that this represents for the state. These two projects combined really make Utah the residential rooftop solar capital of the world. This is a growing market. Solar energy represents about 0.1 percent of the electricity generated in the country, so there is room for two great companies to grow and flourish here, and we’re excited about building this sub-cluster.”
Founded in 2006, SolarCity describes itself as America’s largest solar power provider. It has more than 200,000 residential customers in 18 states and has more than 12,000 employees. The company says it installs about one of every three solar power systems in the U.S.
The SolarCity project represents a $94 million capital investment for the company. The new facility will house regional corporate headquarters and support functions, including positions in human resources, finance, legal, accounting, marketing, sales and more.
“We’ve chosen Utah as a regional headquarters because of its educated workforce and affordable cost of living for those in the professional roles we will create in the Beehive State,” Brendon Merkley, executive vice president of customer operations at SolarCity, said in a prepared statement. “In addition to creating any skilled labor and technical roles, the growing solar industry also has increased demand for professional services and supporting functional roles.”
The project is expected to create about $2.4 billion in wages over 10 years, and new state tax revenues of more than $110.8 million over that time.
The board-approved incentive is in the form of an initial tax credit of $24.4 million over 10 years. If the company generates at least 4,500 jobs and meets some other criteria by the year 2025, it could get a five-year extension to the agreement, allowing it to get another $20 million credit. It also may earn an Industrial Assistance Fund grant of up to $200,000 for the relocation of 50 employees.
“SolarCity’s choice of Utah for its regional headquarters is a reflection of the vibrant growth of alternative energy companies in the state,” Val Hale, GOED’s executive director, said in a prepared statement.
In a company news release, SolarCity said it is hiring at a temporary location — 175 E. 400 S., seventh floor, Salt Lake City —as it scouts for a location for a large corporate campus.
Launched in 2011, Vivint Solar designs, installs, leases and provides monitoring services for its residential rooftop solar energy system customers. At the end of this year’s first quarter, it had installed more than 40,000 distributed solar energy systems on the homes of residential customers throughout the United States.
Its new project represents a $91 million capital investment for the company, which has 2,300 employees outside Utah in addition to the 1,200 in the state. The project would result in new total wages of nearly $1.1 billion and new state tax revenue of about $50 million over 10 years.
“Vivint Solar is proud to be headquartered in Utah,” Greg Butterfield, Vivint Solar’s chief executive officer, said in a prepared statement. “Utah has cultivated a hard-working, innovative workforce and we are excited to continue to expand our operations in the Beehive State.”
“It’s a home-grown company that has been enormously successful,” said Jerry Oldroyd, chairman of the GOED board’s incentives committee. “They’ve been a major player in the technology world [and] the solar world since their inception.”
SunEdison Inc. recently announced a $2.2 billion deal to acquire Vivint Solar, with TerraForm Power Inc. taking over Vivint’s rooftop solar portfolio of 523 megawatts. SunEdison is the world’s largest renewable energy development company, developing, financing, installing owning and operating renewable power plants.
“Vivint has had some pressure to consolidate with SunEdison elsewhere. We clearly would like to keep Vivint here. We would like to keep the growth and expansion in Utah, and that’s why we’re here today,” Oldroyd said before the incentive vote.
“We think this is a very, very good opportunity to develop residential solar in Utah, to help create a sub-cluster in this area, so we would like to keep that expansion here, and we hope that SunEdison will come back with additional expansions as we go forward over the next few years.”
Both Oldroyd and Foxley said that Vivint has been a success story in both technology and alternative energy.
Vivint Solar’s incentive is in the form of a tax credit of more than $12.3 million over 10 years. However, it can be extended five more years, with an added credit of more than $13.8 million, based on certain job-growth criteria. The company also can receive a $200,000 Industrial Assistance Fund grant for the relocation and training of 100 employees.
Rich Larson, vice president of finance at Vivint Solar, told the board that Vivint “looks forward to the continued growth and expansion here in the state.”
After the GOED board meeting, Jeff Edwards, president and chief executive officer of the Economic Development Corporation of Utah, said having two leaders in the solar energy industry will help Utah “open doors across the energy sector,” much in the way that having major Boeing operations in Utah has helped it attract other aerospace and defense cluster companies.
“It changes your calling card when that’s on your list,” Edwards said.