SolarCity’s planned factory in South Buffalo – and the 3,000 jobs that come with it – packs a powerful economic punch.
To be built on the former Republic Steel plant site in South Buffalo, the factory is expected to bring more new jobs to the region than the steel maker ever had in its heyday.
With the ability to make enough solar panels to generate more than 1,000 megawatts of electricity, the factory would be the biggest solar panel factory in the Western Hemisphere and one of the biggest in the world. It would be three times bigger than any other solar panel factory in the United States, and could be in open by early 2016, with full production a year later.
And the announcement that the factory would bring 3,000 jobs to the region is the single-biggest employment announcement in the Buffalo Niagara region in decades, topping the 2,500 new jobs that GEICO promised to bring to its Amherst customer service center.
And the state’s investment of $750 million is more than three times larger than the $225 million originally planned.
“It’s a historic day for Buffalo,” said Howard Zemsky, the co-chairman of the Western New York Regional Development Council. “It’s about next-generation industries. It’s about next-generation jobs.”
Tuesday’s groundbreaking cemented plans, first unveiled in November 2012, to build a solar panel factory on the RiverBend site, initially with California-based high-efficiency panel maker Silevo. Those plans greatly expanded in scope after SolarCity agreed this summer to buy Silevo for as much as $350 million to give it an in-house source of solar panels to meet what its executives see as a fast-growing solar energy market.
While SolarCity said in June that it planned to make the capacity of the Buffalo factory five times bigger than originally planned, the state and the solar panel manufacturer had revealed few details of how the scope of the project was growing. Tuesday’s announcement, which came on the same day that SolarCity closed on its acquisition of Silevo, provided some of those details.
Instead of the $1.5 billion in investment – covering facilities, equipment and payroll, that originally was expected from RiverBend’s first two tenants, Silevo and LED lighting manufacturer Soraa, SolarCity alone now plans to invest $5 billion in the site, including payroll and operating expenses, over the next 10 years.
And employment, which originally was expected to include a total of about 850 jobs from both companies, has swelled to 3,000 jobs just from the solar panel factory alone.
More than 1,450 of the jobs will be manufacturing jobs within the plant. The plant also is expected to lead to the creation of more than 1,400 jobs for workers providing support and services for the factory, state officials said. SolarCity also is expected to create more than 2,000 jobs across the state for workers selling and installing solar energy systems and providing other services.
“This is the biggest accomplishment to date – and it’s bigger than anything we could have imagined,” said Gov. Andrew M. Cuomo.
Under the deal with SolarCity, the state will spend $350 million to build the sprawling factory on South Park Avenue and provide $400 million in funding for equipment, with the state following the economic development model that it used to build up the semiconductor industry in the Albany area. Under that model, the state invests in state-of-the-art facilities and equipment that typically are too costly for companies to acquire on their own and then signs agreements with companies, like SolarCity, that want to access it.
That model has been the linchpin of Cuomo’s Buffalo Billion investment strategy, which aims to create centers in targeted industries, such as medical genomic research, advanced manufacturing and software development, where state officials believe the Buffalo Niagara region can have a competitive edge.
The SolarCity project is by far the biggest single piece in the Cuomo administration’s signature economic development initiative.
“I believe there will be thousands of spin-off jobs,” Cuomo said.
State officials also hope the SolarCity project – and the buzz it generates within the solar energy industry – will help lure other companies from the industry to the Buffalo Niagara region. They noted that the 96 acres that the state purchased earlier in the summer across the street from the RiverBend complex will be part of the state’s Start-Up New York program that allows new businesses with the state’s university system to operate tax-free for 10 years.
“SolarCity is the first big user, but we anticipate other users will come in,” Cuomo said.
SolarCity hopes to have the RiverBend factory built and in production as soon as the first quarter of 2016, said Lyndon Rive, the company’s chief executive officer.
Crews from LP Ciminelli, the project’s developer, have been doing preliminary work on the site throughout the summer, but activity will accelerate now that the state and SolarCity have reached a formal agreement on the financing package. Construction of the factory building itself is expected to take about a year, with a few months after that needed to equip the facility and get it ready for production, state officials said.
“The goal is to get this up and running as early as possible,” Rive said.
By combining Silevo’s high-efficiency panels, which can convert about 21 percent of the sun’s energy into electricity, compared with about 18 percent for standard panels, with cost savings that come from producing solar modules on a massive scale, SolarCity hopes to push down the price of solar energy systems to the point where they don’t need government subsidies to compete with conventional sources of electricity.
“Our goal is to create the most efficient and cheapest module,” Rive said.
With SolarCity’s expanded factory now occupying the entire RiverBend site that originally had been expected to be the home of both Silevo and Soraa, a California-based LED lighting manufacturer, Cuomo said the state is holding discussions with Soraa about potential new sites for their proposed Buffalo facility, which would employ about 375 people.
SolarCity also plans to establish a research and development center in New York, dividing that work between the Buffalo factory and facilities associated with the SUNY Polytechnic Institute in Albany, said Alain Kaloyeros, the school’s chief executive officer.