German solar cell manufacturer Q-Cells is on track to break ground soon in the 3,000-acre site just across the border from Calexico, Calif., about 120 miles east of San Diego. It's likely to be the first of what the developer hopes will be a slew of green technology companies looking to find a low-cost home near California, one of the world's most promising markets for renewable energy.
"Solar is growing so tremendously that it just makes sense," said Daniel "D.J." Hill, chairman and chief executive of Silicon Border Development.
Dubbed the Silicon Border Science Park, the $250-million project will occupy nearly a third of the 10,000-acre parcel that Hill's group has secured for high-tech manufacturing. Modeled after developments in Asia, it will host an engineering college, research offices and recreation facilities in addition to the typical infrastructure required in an industrial park, Hill said.
First announced in 2004, the border project was an attempt to persuade semiconductor fabrication companies to diversify their supply chains by keeping some production in North America.
The growing concentration of chip manufacturing in Asia had some in the industry worried about over-dependence on the region, particularly on China. But Hill said the industry had become so entrenched in Asia that it proved a tough sell. The business park never saw a tenant.
Enter the green-tech boom.
An explosion in oil prices and concerns over global warming are fueling demand for clean technology and alternative energy. California, which has adopted some of the nation's toughest requirements for renewable fuels and reductions in greenhouse gases, is a prime market for companies such as Q-Cells.
The company said this year that it might invest as much as $3.5 billion in the Mexicali project over a mid- to long-term period. Spokesman Stefan Dietrich said he couldn't specify when Q-Cells would break ground since the company was still negotiating with the Mexican government about an incentive package.
But Mexico offers a number of advantages, he said, including low operating costs; preferences under the North American Free Trade Agreement and other trade pacts; and close proximity to potential customers in the United States.
"Transport costs are really an issue, especially with rising fuel prices," Dietrich said.
Hill said Silicon Border Development hopes to build a solar cluster within the science park by attracting photovoltaic suppliers such as glassmakers and silicon firms.
The science park is a joint venture between Hill's group and ING Clarion Partners, a real estate investment firm that's part of Dutch financial conglomerate ING Group. ING Clarion will provide $35 million in capital to fund infrastructure for the first phase of the development, which is to be completed in early 2009.