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1366 Technologies exploring overseas options for manufacturing as DOE slow to come through with promised loan guarantee

By Howard B. Owens

There continues to be one significant roadblock for 1366 Technologies to get around before breaking ground a new $700 million solar wafer manufacturing facility in Alabama -- getting the Department of Energy's final approval on a previously promised $150 million loan guarantee.

If that loan guarantee isn't finalized, 1366 Technologies, instead of creating 1,000 good-paying jobs in Genesee County, could turn to an overseas location for its manufacturing facility.

"We remain focused on the U.S. and U.S. job creation," said Laureen Sanderson, spokeswoman for 1366. "We continue to work closely with the State and GCEDC, who remain committed to the project, and we’re in active discussions with the Department of Energy. Those discussions have been positive, but we’ve yet to receive a final indication on the status of the loan."

The Boston Business Journal reported today that 1366 just secured another $9 million in funding from investors, bringing the total raised to $89 million. The article also raised the specter of 1366 locating its facility in another country.

The company identified a site in New York for that manufacturing facility, but is still working to officially secure the funding from the DOE. In the meantime, a company spokesperson said, 1366 is exploring the possibility of building its first factory abroad due to the commercial interest its technology has received internationally.

"We are exploring possibilities to build factories internationally, but that has always been part of our plan," Sanderson said, adding, "It is understood that building in the U.S. is only possible if the loan is accessible. If it’s not there, we need to pursue the other options available to us."

The factory would be about 130,000 square feet and located in the advanced manufacturing park under construction in Alabama known as STAMP. It's been a decade-long process by Steve Hyde and the GCEDC to bring STAMP to fruition and 1366 Technologies is the first, and so far, only significant tenant announced for the park.

The company selected STAMP in part because of its location to low-cost, clean energy, specifically, hydropower from Niagara Falls. 

The proprietary method 1366 Technologies uses to manufacture solar wafers was developed at MIT and leads to solar wafers that are more efficient, produced at lower costs and with less waste than the way solar wafers are manufactured currently. The company's immediate goal is to manufacture wafers domestically for export to large solar installations overseas, such as the one completed earlier this year in Japan

Hyde said GCEDC remains committed to bringing 1366 to Genesee County.

He issued this statement:

The Genesee County Economic Development Center (GCEDC), along with our U.S. Senate and Congressional delegates, continue to work with 1366 Technologies to help secure the US Department of Energy Loan Guarantee that will enable the company to build their first Direct Wafer manufacturing facility at the Western New York Science and Technology Advanced Manufacturing Park (WNY STAMP).

We believe that the Company has clarified their intentions that their strategy is a U.S. manufacturing first strategy and as such fully aligns with their previous commitments to establish their U.S. manufacturing hub at our 1,250-acre STAMP High Tech Mega-Campus here in Genesee County.

Rep. Chris Collins, through a statement issued by staff, said he is doing what he can to help secure the loan guarantee for 1366.

Congressman Collins has been actively working with partners at the Genesee County Economic Development Center to assist in opening a dialogue with 1366 Technologies and the U.S. Department of Energy. The Congressman is pleased that Secretary Rick Perry recently met with 1366 Technologies executives to discuss this project. These conversations are necessary to make sure that any significant taxpayer investment in the form of a government backed loan is made prudently.
We are hopeful that an understanding will be reached that protects taxpayers while creating economic opportunity in Genesee County. The Congressman will continue in his role in assisting this conversation and always remains committed to supporting efforts to create jobs in Genesee County.

The loan guarantee was promised to 1366 in 2011 but during the transition to the Trump Administration, there were delays related to the transition.

Sanderson said, "There was a transition with the change in administration and that was more challenging than we had expected. However, we’re now having the right discussions and those remain active."

The company is entering a highly competitive solar market that is booming (Solar Employs More People In U.S. Electricity Generation Than Oil, Coal And Gas Combined). Sanderson acknowledged the company, which currently has a small facility in Boston that employs 60 people, is keen to move forward with full production.

"We’re eager to bring the technology to mass production because we know what it can do for the industry and for consumers’ ability to access inexpensive solar power," Sanderson said. "But we’ve certainly taken advantage of the time in the run-up to scale to make additional technical gains. We’ve now surpassed the efficiency of the incumbent technology and have a cost advantage that no sawn wafer can beat. We’ll continue to make gains as the first step – but certainly not the last – in our scaling effort crystallizes."

UPDATE Friday, 10 a.m.: Statement from the office of Sen. Charles Schumer:

“Last month Senator Schumer spoke directly to U.S. Department of Energy Secretary Rick Perry and urged him to reach out to the 1366 Technologies CEO and meet with 1366. Almost immediately after the conversation, Secretary Perry reached out to the CEO and met that following week. Our office remains in very close contact with 1366 Technologies and the Department of Energy,” said Jason Kaplan, spokesman for Senator Schumer.

John Roach

We have spent years and tens of thousands of dollars on this project, and not one job yet. And we keep getting told we just have to put in more money into it, and they will come. The have bet everything on 1366 coming and what will be the story if they don't?

Nov 2, 2017, 7:57pm Permalink
david spaulding

lol ......... how much have the taxpayers invested ? ....... Steve, vacation is over for now. The people have a couple of questions for you. No Steve, put the rubber stamp down, How much has it cost us so far? How much are we still obligated for ? All that wheeling and a dealing with a company that is hoping 150 million dollars will fall from the sky.... If this is true these actions spell incompetent..... I can smell a pink slip.....

Nov 2, 2017, 9:14pm Permalink
Brian Graz

"There was a transition with the change in administration [Pres Trump] and that was more challenging than we had expected. However, we’re now having the right discussions and those remain active." LMAO

Yea, with the Trump administration, we now have a business smart, fiscally financially responsible manager in charge.

As for Steve Hyde remaining "committed" to 1366, he has to be... I'd say it is his lifeline to the lucrative "highest paid EDC director" job he has.

Nov 2, 2017, 10:59pm Permalink
Scott Chismar

More Corporate Welfare. Giving millions of tax payer funds to those who pay peanut wages. The rich get richer and the working stiff gets the shaft.

Nov 2, 2017, 11:21pm Permalink
Howard B. Owens

So many people actively rooting for our county’s economic failure. Amazing. Yes, let China steal 1,000 good wage jobs from us. America First, after all. #MAGA. We’ll just all stay on the negativity train.

Nov 3, 2017, 8:59am Permalink
Jeffery White

"Yea, with the Trump administration, we now have a business smart, fiscally financially responsible manager in charge."

They're looking for a loan, you know, the thing you have to pay back with interest on top of it.

Sounds like your 'smart businessman' is throwing away free money, probably because it isn't going to a company (read: Oil/Coal) that voted for him.

Yup, smart! You'll all be amazed how smart he is!

Nov 3, 2017, 9:03am Permalink
Howard B. Owens

Actually, it's just a loan guarantee. A financial institution will make the loan. It costs the government nothing, like a majority of home mortgages. Like an FHA loan, there's probably an insurance premium to pay that helps pool the risk of such loans. The loan guarantee probably will also help attract additional investment capital from private investors.

Nov 3, 2017, 9:52am Permalink
Howard B. Owens

Actually, it's a little different than FHA. The borrower pays a "credit risk subsidy" (which, is, essentially insurance) and the DOE can be direct loans.

As the article points out, the federal government has been doing this sort of thing for more than 200 years.…

Patterson, NJ was built on government subsidies when Alexander Hamilton and co-investors wanted to built a textile mill there.

Nov 3, 2017, 9:56am Permalink
Howard B. Owens

Here's what we're competing against with China

"Beijing offers direct financial and political support for its strategic industries, 365 days a year. The government protects Chinese companies charged with stealing the intellectual property of foreign firms. It provides direct funding for strategic sectors. It writes laws designed specifically to help them grow. And it engages in industrial espionage and cyberattacks against foreign competitors."

One of its strategic sectors is energy and China is one of the world's biggest investors in solar.…

How business savvy is it to let China win?

Nov 3, 2017, 10:01am Permalink
Tim Miller

"Yea, with the Trump administration, we now have a business smart, fiscally financially responsible manager in charge." ?!?

My gosh I hope you were being sarcastic!

SIX bankruptcies...…

MANY MANY contractors screwed over by Trump not paying them...

Liens on Trump properties due to non-payment of bills:…

I really, really hope you were being sarcastic. Otherwise there are some major delusions involved.

Nov 3, 2017, 10:37am Permalink
Scott Chismar

Any incentives should be about fairness from the top down. Let's not forget about Muller Yogurt. Does anyone really think that PepsiCo needed monetary incentives to come to town? Nope. They just want something (tax breaks) for nothing. Then when they leave town we are left holding the bag. It happens time and time again.

I would like to see any tax incentives given to these major companies come with guarantees of a living wage for workers and on the job protections. Ever notice how so many Companies who have received IDA money never reach their projected hiring goals? But once they get the money, they sing a different tune and the employment numbers then become job "retention" instead of job "creation".

It is all Corporate Welfare.

Nov 3, 2017, 3:08pm Permalink
Howard B. Owens

Does anyone really think that PepsiCo needed monetary incentives to come to town?

Yes. Without incentives, they would have gone elsewhere. Would you rather they have invested their $206 million in Pennsylvania (which was a strong competitor for the plant)?

"They just want something (tax breaks) for nothing."

Well, no, the incentives were a drop in the bucket compared to the $206 million investment and for a while they did create jobs. And then learned they didn't really have a very good product idea and shutdown before most of the incentives were received.

"Then when they leave town we are left holding the bag."

No, we were given a $206 million gift of a state-of-the-art dairy facility that another company is now putting to productive use.

Nov 3, 2017, 3:30pm Permalink
Scott Chismar

Howard, I think the Muller/Pepsi deal was a joke. If you or I had a business idea and put our hand out for incentives, what luck would we have in getting millions of dollars? And by your own admission, they did not have a very good product idea. So I do not believe that we should be in the business of financing business ideas (especially bad ones) for Companies that can afford to foot the bill themselves. Again, it is Corporate Welfare.

And while you did mention that they created jobs while they were here, how good were those jobs? Did the workers make a Living Wage? Did they receive a pension? Sadly, they were just pawns in PepsiCo's game. I know a guy who worked there. He left a very good job in hopes of having a better career with Pepsico. He believed their hype. Sadly, Pepsico lied about their intentions here. My friend not only lost his job, but went on to lose his house and family. I think the Pepsico Executives do not really care about how they destroyed lives here with what they did. It would be nice if Politicians and the power brokers cared as much about the little guy as they did about the Multinational Corporations.

Nov 3, 2017, 5:01pm Permalink
Howard B. Owens

If I came up with a good business plan and demonstrated the wherewithal to pull if off, I could get the appropriate incentives and so could you or anybody else. A good portion of incentives go to people just like you and me, local residents who built a business and grew a business.

It wasn’t apparent when they started that it wasn’t a good business idea. It’s a lot easier to judge a business proposal in hindsight.

There were many good paying jobs at the plant. Pensions? Those died with the 1970s. Except in Union shops, and that isn’t true any more, hardly anybody get pensions these days. At best they get a 401k with an employer match.

Pensions destroyed the U.S. auto industry. Businesses have been running from them as fast as they can. One of my former employers forced me to cash out my pension account a couple of years ago.

There no evidence whatsoever for your assertion that Pepsi lied.

It’s sad to hear the about your friend but free markets are inherently unstable. We all take our chances by participating. But it’s better than the alternatives.

I’m not a huge fan of multinational corporations, but Pepsi is a business is just like any other business. They must consider in their decisions not only for their shareholders, which are mostly 401k holders like mentioned above these days, but the rest of their work force. They made a stab at a new business venture. Bully to them for taking a risk. It didn’t work out. That’s too bad for a lot of people. But they can’t lose money indefinitely on such a venture. Eventually they must pull the plug for the sake of the rest of the stake holders.

Nov 3, 2017, 7:40pm Permalink
Howard B. Owens

It’s not like you have any choice. In business when you’re an incumbent, you don’t choose your competitors. They choose you.

And China over the past decade has paid enough to lift more than a billion people out of poverty.

Nov 3, 2017, 9:54pm Permalink

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