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MARCH 2006

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Business Cost Advantage

   "We might expand closer to our markets, but the economics are not driven primarily by distance from the markets," Schmit explains. "It's raw materials and the overall cost of doing business. Before I moved to Albuquerque, I was managing another solar company in France, and we can make things here [in the U.S.] and sell into Europe at a net cost lower than we could by manufacturing in France due to labor, taxes and so forth."
   Elsewhere in Albuquerque, UniRac, a manufacturer of solar energy panel mounting products, has moved into a larger operation at Springer Industrial Center to accommodate its rapid growth. The company expects to double its 40-person payroll within the next three years.
   In late January, Phoeniz, Ariz.-based Stirling Energy Systems was finalizing a location for a 1-megawatt, 40-dish solar power plant that would serve as a test facility for a much larger project announced in August 2005. Stirling and Southern California Edison will construct a 4,500-acre (1,822-hectare) solar generating station in the Mohave Desert northeast of Los Angeles that will be the world's largest solar facility at 500 megawatts. Among the candidate locations for the smaller project are Sandia Labs and the Mesa del Sol development. Another southern California site is also under consideration.
   But do the solar panel companies in fact want their peers at the same location? Time will tell, but Schmit is in favor of it.
   "It increases the supplier depth, and it creates more incentives for technical schools to develop specialized programs," he points out. "There is the issue of competitiveness and the possibility that we could lose some employees. But we could gain some, too."

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