States Vying for Alternative-Energy Firms

With hybrid electric cars and solar power technology gaining momentum, several states are vying to lure high-tech manufacturers and suppliers of plug-in batteries, solar cells and more to boost employment and tax revenues.

Michigan is a leader in corralling makers of advanced lithium-ion batteries that will let autos such as the Chevy Volt run solely on electricity for short jaunts. Using grants and tax credits, the state has persuaded advanced battery makers such as A123 and consortiums LG Chem-Compact Power and Johnson Controls-Saft to build plants in the state.

Ford and General Motors are also ramping up battery facilities in the state, retooling existing facilities to assemble plug-in cars, starting around year-end. When the plants are operating at full capacity -- by 2014 or so -- annual battery sales are expected to top $5 billion.

Among others in the mix: Indiana, which has landed EnerDel, a company that, for starters, will produce plug-in battery packs for Volvo. And California, which just persuaded Fisker Automotive to move the engineering skunk works for its plug-in-car program to the state from Michigan. Though Fisker plans to build its plug-in in Europe, landing its research and development operations is a coup for California.

California officials are also helping Tesla Motors, which plans to build high-end electric cars in a shuttered plant in Fremont, Calif., where GM and Toyota used to jointly build cars.

Meanwhile, sun-drenched Western states are duking it out to attract makers of solar cells.

Arizona is dangling income and real estate tax relief worth about $350 million in efforts to lasso a big chunk of the $4-billion-a-year U.S. solar cell industry, which is likely to double sales by the middle of the decade. The state beat out Austin, Texas, in luring China’s Suntech Power Holdings, the world’s largest maker of solar cells, to locate a manufacturing facility in Goodyear, Ariz.

The state has also landed the solar manufacturing arm of Michigan-based Tower Automotive and has persuaded NextLight Renewable Power, which is headquartered in San Francisco, to build a facility in Arizona. Look for Arizona to land two other Chinese solar manufacturers -- Trina Solar and Yingli. The latter currently has operations in California.

California also is using come-hither incentives and the draw of solid electricity contracts with in-state utilities, which are under state mandate to boost the amount of electricity they sell made from renewable resources.

To date, California has swayed First Solar and Stirling Energy SystemsStirling Energy Systems to build solar farms there and not in Arizona, where the firms are headquartered. Scottsdale-based Kyocera Solar, a subsidiary of Japan’s Kyocera Corp., chose San Diego for its new solar cell manufacturing plant.

Within a year, look for New Mexico to jump into the fray. It’s putting the finishing touches on economic incentives programs and a business development shop to recruit start-ups as well as lure existing solar industry manufacturers to the state.