To Foster Green Energy, State Needs to Make Bets

October 20, 2009 : The Boston Globe, Editorial

Two years ago, Evergreen Solar Inc. was thriving, and Governor Patrick had every reason to bet public dollars to encourage the Marlborough company to build a solar-panel factory at the former Fort Devens. As the price of solar panels has plunged since then, the company has struggled, inviting questions about the wisdom of the initial round of public support – and of a $5 million loan recently approved by the agency MassDevelopment.

But the state can’t foster a successful green-energy sector without making bets, and Patrick acted wisely to promote an industry that draws on Massachusetts’ existing assets, including world-class scientific research and an educated workforce. With its relatively cold climate, Massachusetts is an eager consumer of renewable energy, making the investment an even better synergy. The potential long-term benefits, which are significant, justify taking some risks.

Many other states want to play host to so-called green-energy companies – which squeeze kilowatts and megawatts out of efficiency improvements, the wind, and the sun – and are willing to offer grants, loans, and tax exemptions accordingly. Even with the company's future in some doubt, the Evergreen Solar bet still looks justifiable for Massachusetts.

The initial package included about $20 million in grants, plus tens of millions of dollars more in infrastructure improvements and other enticements. The price tag seems stiff, especially now that state services are in jeopardy and Patrick is threatening to cut jobs in state government. But the company has spent $435 million to build facilities that now employ about 800 people.

Critics offer principled objections to targeting public dollars to specific businesses, and question whether state development agencies are sophisticated enough to offer such incentives skillfully. But Massachusetts did not even offer the most generous incentives; other jurisdictions promised Evergreen more. The state would have been remiss if it assumed that the presence of good universities alone were enough to attract and retain advanced manufacturing facilities. History has shown otherwise.

Evergreen’s destiny is hardly assured. The company faces tough competition from solar panel companies in China, and analysts have fretted about how quickly it is burning through cash. Its need for the $5 million MassDevelopment loan is a troubling sign.

Fortunately, that loan is secured by plant equipment. Public support obviously can't be unlimited. And once Patrick and other state officials have invested their own reputations in a project, it's that much harder to cut their losses. Still, the state must do what it can to be a leader in renewable energy. The chance to make Boston the Houston of renewables is a dream worth pursuing – even if it requires some cash up front.