After putting together an incentive package worth more than $50 million, Jacksonville has shown that it's serious about getting solar panels manufactured within its borders. The Jacksonville City Council put their stamp of approval on the package only one day after President Donald Trump instituted significant tariffs on solar panels manufactured outside the United States.
Here's Jacksonville title Loans look at what brought about this incentive package, how much it's worth and what it could mean to Jacksonville.
New Tariffs on Imported Solar Panels
On January 22, 2018, President Trump put tariffs on all solar panels and other solar equipment coming from outside the country. The policy lasts for four years, and for the first year, the tariffs will be 30 percent, although there is an exemption for the first 2.5 gigawatts of solar cells that get imported. Over the four years of this policy, the amount will gradually taper down to 15 percent.
The motivation for these tariffs are that the U.S. International Trade Commission determined in October that American manufacturers are having a hard time competing with Asian manufacturers. The trade commission even recommended a higher tariff amount of 35 percent. These tariffs are intended to help American manufacturers compete. And, of course, they follow one of Trump's campaign promises, which is to get tough with China.
How Jacksonville's Incentive Package Would Work.
The solar company that this incentive package is for has been left unnamed to this point, although it's said to have quite a few manufacturing plants and affiliate locations all over the world. It doesn't have anything in the United States as of yet, though, and Jacksonville's incentive plan would look to change that.
The incentive package, which is known as Project Volt, can be worth almost $54 million. Here's what this solar company would need to do to comply:
- Open two facilities in Jacksonville.
- Employ 400 people by the end of 2018.
- Employ another 400 people by the end of 2019.
There are already two warehouses picked out for this company, and they're at the following locations:
- 4660 New World Ave – This would be the site of the company's main manufacturing operation
- 2969 Faye Road – This would be where the company assembles its solar panels
Most of what the city would contribute is a recaptured enhanced value grant, or a grant that a company can use to balance out any property tax increases. This grant would be for a period of 10 years and is worth $23.8 million.
Another way the city would contribute is through job incentives. The maximum amount it will put in here is $800,000 for jobs that are part of the Qualified Target Industry Tax Refund program. All jobs that have average wages exceeding $45,562 would fit the bill and receive a $5,000 per job incentive. Should the company provide the full 800 desired jobs, then the state of Florida would kick in $3.2 million through tax refunds.
There are also a few other big time state incentives involved, including:
- A Capital Investment Tax Credit that can be worth up to $20.5 million
- A High Impact Performance Incentive that can be worth up to $5 million
The company will qualify for more grants if any of its jobs go to veterans. There's a Veterans Florida Business Training grant worth $8,000 for each veteran employed, up to an annual maximum of $200,000.
How Project Volt Benefits Jacksonville
While both the city and state would be providing quite a bit in incentives, it'd be huge for the community if this company decided to open locations in Jacksonville. There would obviously be the aforementioned 800 jobs. On top of that, the terms of the incentive package also require the company to invest a considerable amount on real estate upgrades and new equipment at both warehouses. Here's how that would break down:
- The company would need to put $120 million for real estate and $150 million for equipment at the warehouse on New World Ave
- The company would need to put $33 million for real estate and $107 million for equipment at the warehouse on Faye Road
Overall, the incentive package could be a mutually beneficial arrangement between this company and the city. Now, it's just a matter of seeing if the company decides to agree to everything.