San Jose selected as site of major solar plant
Anthony Townsend
real_estate/16220271.htm
Posted on Tue, Dec. 12, 2006
COMMERCIAL REAL ESTATE
S.J. selected as site of major solar plant
MOVE BY NANOSOLAR ESTABLISHES VALLEY AS `CRADLE FOR CLEAN TECHNOLOGY'
IN U.S.
By Katherine Conrad
Mercury News
Nanosolar will open one of the world's largest solar cell
manufacturing facilities in South San Jose by spring, placing the
city at the forefront of an emerging technology.
Wooed by the mayors of San Francisco, Oakland and Santa Clara -- all
of whom coveted Nanosolar's potential 200 to 300 jobs -- Chief
Executive Martin Roscheisen said he was attracted to San Jose by its
educated workforce, the city's experience in working with high-tech
companies and its ability to streamline the permit process.
``It's clear San Jose knows how to deal with the Ciscos and eBays.
They understand the issues, the logistics, the transportation
needs,'' said Roscheisen, who founded the company in 2001 with Brian
Sager. ``And we can get a permit within a matter of days. Other
regions would take several months.''
The selection of San Jose, according to Rhone Resch, president of the
Solar Energy Industries Association in Washington, D.C., establishes
Silicon Valley as the ``cradle for clean technology development in
the United States.'' Two other solar companies, Miasolé of Santa
Clara and SunPower of San Jose, also are located in the valley.
``If they manufacture all 400 megawatts on site, it will be the
largest solar manufacturing facility in the world,'' Resch said.
``They are establishing a new benchmark with respect to the size of
the facility.''
Nanosolar is currently located in two sites in Palo Alto, where
engineers work behind plastic partitions to develop the technology
that promises to reduce the cost of solar panels. Resch called the
development of thin film a ``breakthrough technology.''
``Because they have lower material costs, and potentially higher
volume production, Nanosolar may be able to produce solar cells at
levels not seen in the market today,'' Resch said.
400 megawatts
Since receiving $100 million in funding in June, Nanosolar has been
searching for a building where it could manufacture enough solar
cells to generate about 400 megawatts of electricity -- roughly three
times the country's current output -- and enough energy to power
about 100,000 homes.
Unwilling to build a new plant, Roscheisen said Nanosolar searched
for a building with high ceilings, room to grow and plenty of power,
about four megawatts, to run the facility where the solar cells will
be manufactured out of nanoparticle ink and printed on thin film.
Roscheisen said he was referred to Mission West Properties President
Carl Berg by a Nanosolar employee, so he checked out buildings in
South San Jose. Late last week, he signed a lease for 90,000 square
feet of a 204,000-square-foot building on Hellyer Avenue. The
building, constructed in 1996 by Mission West for Stratacom, was
previously owned by Cisco Systems, which bought Stratacom. Berg said
he bought the building back from Cisco earlier this year.
``The biggest thing we offered them was a very fair rent and great
flexibility of space,'' Berg said. ``This is very significant. I've
spent quite a bit of time in China and it's very tough for us to
compete with manufacturing there because it's so cheap. But for a
number of reasons, Nanosolar needs to be in the U.S.''
Incentives from PG&E
PG&E spokesman Brian Swanson said the utility company worked with
Nanosolar and San Jose to develop an incentive package for the
company. PG&E will offer Nanosolar a 25 percent discount on its
energy bill for the first year, decreasing by 5 percent each year for
the length of the 5-year lease. PG&E also will offer rebates for both
energy-efficient design and the installation of solar panels on the
roof.
Neither Berg nor Roscheisen would reveal the value of the five-year
lease, but rates for industrial property in South San Jose average
between 75 cents and $1.25 a square foot per month. Roscheisen would
only say he is paying less than $1 a square foot for the space,
putting the lease's value at about $5 million. Roscheisen said the
property also appealed to him because it offers Nanosolar room to
expand, plus another 150,000 square feet could be built next door.
``A tenant this large is critical to turning around the South San
Jose market,'' said Berg, who said vacancy in South San Jose is about
30 percent.
More incentives
The city is also negotiating with the state to obtain money for
Nanosolar to help train the 200 to 300 employees who will be hired to
run the facility. Ru Weerakoon, San Jose's director of industrial
development, said the city is also offering a 1 percent tax exemption
of the costs of retrofitting the building to Nanosolar.
``I've been here 17 years, and we've had companies like Hitachi that
have had pilot manufacturing programs on their campuses, but nobody
new has come in here with this kind of operation in a number of
years,'' said Weerakoon. ``This is a phenomenal opportunity. The hope
is when a company like this moves in, they become the catalyst that
draws other . . . emerging technologies.''
``This valley is no longer a one-industry town.''
For Mayor Ron Gonzales, who will be leaving office in January, it was
very satisfying that the company made the decision to locate in San
Jose before the end of the year.
```I'm so glad we developed an economic strategy that looked to the
future and the new business in the areas of nanotechnology,
bioscience and the environment,'' said the mayor, who met with
Roscheisen during the summer.