Henderson is a small North Carolina town with a quaint, movie-like main street tucked along I-85 near the northern edge of the state. Tobacco historically has been this rural community’s economic backbone, and, like many other one-industry towns across the country, jobs aren’t easy to come by.
But that is expected to change in the coming years, as Semprius, makers of high concentration photovoltaic solar modules, breaks ground on and begins operating a pilot production plant there, creating 256 jobs in this economically distressed town.
A symbiotic relationship
In a lecture at the University of Illinois, Semprius CEO Joe Carr said it takes a village to raise a company, just like it takes a village to raise a child. Ideas are like seeds, and it takes a community of supporters to nurture that seed and turn it into an innovative solution to today’s challenges.
“You really have to have the entrepreneurs come in and the venture capital groups come in,” he says, “and then I would take that one level further: You have to have government agencies understand it really does take this village to grow a company, and each one contributes in its own way.”
The Semprius story is a case in point. The Durham, N.C.-based company uses a patented micro-transfer printing technology to create extremely tiny solar cells. At 600 microns (think ink dot), they’re the world’s smallest solar cells, and over each cell, a lens concentrates the sun’s power 1,100 times.
The smallness of the cells enables greater efficiency in everything from packaging to power generation.
The smallness of the cells is groundbreaking, but more importantly, it enables greater efficiency in everything from packaging to power generation, all of which drives down the cost of the module. By Semprius’ calculation, Carr says, their solar cells on a per-watt basis cost a quarter of what their competitors do.
It’s a potential game-changer, and the state saw that while Semprius was still in its research and design phase, awarding it a grant from the North Carolina Green Business Fund in 2009. The state wasn’t alone in recognizing the potential of Semprius’ technology; the company also received awards from the Department of Energy under its Solar America Initiative during its research and design phase.
Once Semprius proved its technology could be applied successfully to the solar energy market, it was time to get a pilot production plan underway, and North Carolina wasn’t alone in wanting that production plant and the jobs it would create. Carr says Virginia and Michigan were both courted his company very aggressively, and that Virginia was in strong consideration. But North Carolina and its package of incentives for the plant proved the most attractive option.
Partnering for success
If there’s one word that describes the state’s overall relationship with Semprius, it’s “partner.”
A major component of the incentive package is North Carolina’s Job Development Investment Grant, which is distributed over 11 years. Semprius will receive 61 percent of state personal income withholding taxes derived from the creation of the 256 jobs in a five-year period. The newly created jobs must be maintained over the next six years to continue receiving the grant money, which leads to a potential total grant of $3 million. The company has also received a $600,000 grant from the One North Carolina Fund, which is distributed after companies meet job creation and investment targets.
Additional support was provided by North Carolina’s Golden LEAF Foundation, which provides grants to nonprofits and government entities for projects that will economically transform rural, primarily tobacco-dependent communities. In this case, Golden LEAF provided $1.25 million to Vance County, Henderson’s county, to purchase the equipment Semprius would need to build the plant, and Semprius will rent the equipment from Vance County.
The incentive package includes a program with the North Carolina Community College System, in which the two organizations work together to develop a comprehensive training program to develop a skilled, trained workforce that can jump into the job ready to get the work done.
“Local colleges become partners for success with the company.”
“The intent is that with any project our local community college is seen as the partner to that organization’s success,” says Maureen Little, the college system’s associate vice president for customized training. “Local colleges become partners for success with the company.”
North Carolina Department of Commerce Deputy Secretary Dale Carroll likens economic development to a team sport in the Olympics, in which players from different backgrounds and areas come together and form a relationship that leads to a winning team.
“The Semprius project is a great example of that team, that partnering, the collaborative effort leveraging resources and stretching our limited dollars to go further and everybody playing to their respective strengths,” he says. “It was an outstanding team effort.”
Economic development depends on partnership
Carr believes incentives packages such as those provided by North Carolina are an extremely important component for large-scale job creation. Semprius, for instance, is a small company that developed a product and validated its business model, and then came time to actually manufacture the product to put a pilot line in place, a part of the process Carr likens to entering a valley of darkness.
“What these sorts of incentives allow us to do is build a manufacturing base here in the U.S.,” he says. “It provides a little cushion through that valley of darkness that you have to go through from a funding perspective.”
But incentives benefits extends beyond the funding. Because the grants Semprius received have performance requirements, it behooves the company to find long-term success, and because Semprius has guaranteed job creation, it behooves the state to help ensure ongoing success.
“It helps really cement the relationship between the company and the state so that you can grow the business to a very high degree,” Carr says.