Sep. 17--Washington is falling short of its potential to attract solar panel manufacturers, say the results of a report released by GTM Research and the Prometheus Institute this month.

Washington ranked No. 4 among the top 10 most favorable states for silicon-based solar panel manufacturing, yet it's the only state among them that doesn't have any constructed or planned facilities.

"It means that (Washington) has an opportunity that is not being taken advantage of," said Shyam Mehta, an energy analyst with GTM Research and the report's author.

Washington ranked behind Oregon, Michigan and Arizona, but came in No. 4 because of its low-cost hydroelectric power, an existing work force related to silicon technology production and strong tax incentives for solar manufacturing.

Southwest Washington in particular is already a hub of semiconductor manufacturing with silicon wafer production, a necessary component of solar cells, at companies such as SEH America and chipmaking at WaferTech and Linear Technology.

But regional leaders have so far failed to attract solar manufacturers here, despite economic development plans that call for expansion of the semiconductor industry into the solar arena.

"We haven't seen any sort of significant investments in this (solar industry) boom," said Bart Phillips, president of the Columbia River Economic Development Council. "We were short-listed and have lost a number of facilities to our competitor in Oregon."

By the end of this year, 28 photovoltaic factories will be fully built in 15 states with seven in California and two in Oregon alone, according to the report.

Oregon's victories

In the past few years, Oregon has attracted:

n Solar World's 375-megawatt manufacturing facility in Hillsboro, the third-largest solar manufacturing facility in the U.S.

n A Sanyo 70-megawatt project in Salem, Ore., set to open by the end of the year.

And while Washington has several companies in the solar manufacturing value chain, including solar inverter manufacturers and raw solar silicon processors, no solar panel manufacturers have moved to the state.

The reason Washington can't keep up, Phillips says, is that it doesn't have the same cash incentives that Oregon does. The two states rank closely in terms of the range of tax breaks available to renewable energy companies. But Oregon allows companies to sell their tax breaks early to other companies, providing much-needed cash.

"For long term operating cost you want to come to Washington," Phillips said.