Clean-energy jobs touch off bidding wars between states

— -- When Arizona economic development officials look across their state, they envision the Saudi Arabia of solar.

The state has sun, land, workers and proximity to California, the biggest solar market in the U.S.

Yet for years, Arizona has failed to attract the big solar manufacturers that build the mirrors, panels and other components for solar equipment. In the past three years, about 50 renewable-energy companies considered Arizona but opted to put plants — and jobs — in other states, says Barry Broome, CEO of the Greater Phoenix Economic Council.

"We've lost every one of the projects to incentives offered by other states," Broome says.

Arizona hopes to improve its odds in what's become a pitched battle among states to nab renewable-energy companies, including those in the solar, wind and biomass sectors. Come January, Arizona will have $350 million in new incentives at its disposal to woo renewable-energy firms.

Renewable energy has emerged as the new frontier in economic development in the U.S. And states, such as Arizona, are rolling out tax breaks, job training and cash to try to capture a piece of the action and the job growth it promises.

"This is definitely the industry of the year from an economic-development standpoint," says William Becker, CEO of Incentives Advisors, which helps firms access and manage state incentives. "I've never seen such a rapid increase in the number of state programs for one industry."

The fervor is driven by expectations of increasing demand for renewable energy. States, especially California, are extending big incentives to consumers and businesses to go green. Two dozen states require electricity providers to supply more power from renewables, and a handful of other states have set renewable goals. Meanwhile, billions of dollars in venture capital is going to so-called clean-tech start-ups in everything from alternative fuels to energy storage and generation. The federal government has also dedicated more than $100 billion to the clean-tech industry via grants, loan guarantees and other incentives, says consulting firm Ernst & Young.