How could a maker of photovoltaic cells for the solar industry go belly up just several months after opening and  being lauded by business leaders and politicians and receiving millions of dollars in private investment, state and federal funds, not to mention tax incentives?
We”™re not exactly sure, but we do know it”™s unhappy holidays right now for 117 workers at the SpectraWatt plant in East Fishkill who found out last week that they won”™t have jobs come spring barring a miracle. Layoffs will begin March 20 and end April 4 with the plant”™s closing, according to a filing with the New York State Department of Labor.
SpectraWatt”™s statement about the shutdown was terse:
“This action is undertaken in response to deteriorating market conditions resulting from a harsher-than-usual European winter causing a large drop-off in demand for solar cells. The company continues to pursue alternatives aimed at improving its current situation and hopes to reverse this action.”
It appears SpectraWatt put all of its eggs in one basket. Not a very good business plan.
According to the governor”™s office, in 2008, the state negotiated with Globe Specialty Metals, which was expanding a silicon manufacturing plant in Niagara Falls, to provide a portion of its solar-grade silicon in return for 40 megawatts of low-cost hydropower. To attract SpectraWatt, Empire State Development (ESD) dangled 200 metric tons per year of the solar grade silicon as an incentive to move to East Fishkill. Those 200 metric tons represented 20 percent of the state”™s option.
In addition to silicon, SpectraWatt received money ”“ $3 million from ESD for the project and $1.5 million from NYSERDA, the New York State Energy Research and Development Authority. Also throwing in help were Dutchess County and Central Hudson Gas & Electric.
The brunt of the $81 investment ”“ $50 million ”“ in the project was picked by Intel Capital. SpectraWatt initially was to set up shop in Oregon, but those plans were put on hold when financing to build fell apart. It decided to find a building it could retrofit.
SpectraWatt began life in June 2008 spun off from Intel Corp. In addition to Intel, its investors included Goldman Sachs and the German solar firm Solon SE. In an April 7, 2009 statement by the governor”™s office, this troika would position SpectraWatt “as a powerful contender in the world solar market.”
In October 2009, SpectraWatt was featured in Gov. David Paterson”™s “Bold Steps to the New Economy: A Jobs Plan for the People of New York.”
So much for that endorsement.
With only that two-sentence announcement by SpectraWatt to go by, it”™s hard to determine how far in the hole it is.
If there”™s a way to save them without putting this state further in debt, then do it. The potential loss of 117 workers coupled with the recent shutdown of an Ulster County company is hurting the Hudson Valley”™s economy in yet untold ways.
Just seven weeks ago, Partsearch, a company at Tech City, said it would lay off at least 130 workers at its Ulster and New York City locations. Partsearch blamed its woes on the loss of Best Buy, its biggest client.
Let”™s hope that the next business lured to the state is thoroughly vetted before any investment with public monies is made.
“It appears SpectraWatt put all of its eggs in one basket. Not a very good business plan.”
Yes. It’s called “solar”.