Solarex Corp., the country's largest manufacturer of solar energy panels, will continue to operate in Frederick, thanks to a $3.7 million state loan package.
"We've preserved the Solarex presence in Maryland," said Mark L. Wasserman, secretary of the Department of Economic and Employment Development (DEED). "We see a reinvestment and recommitment to production at the Frederick facility."
The loans will help finance a $7.7 million expansion program that will triple production during the next five years and boost the work force from 230 to 280 by the end of 1996, according to a company press release.
Solarex, a subsidiary of the oil company Amoco Corp., has manufactured photovoltaic panels in Frederick since 1981 and sold between $30 million to $40 million of the solar energy products last year, according to Solarex spokeswoman Sarah Howell. In 1992, the company also moved its administrative and headquarters operations to Frederick. Its landmark building is distinguished by a bank of photovoltaic panels that can been seen from Interstate 70.
In the past year, the company's presence was threatened by a new Virginia program designed to lure makers of solar power equipment. The $22.5 million program will pay qualifying companies a subsidy of 75 cents for every watt that can be produced by solar equipment they make in the state. The subsidy was limited to $22.5 million for all companies that qualified from the beginning of 1995 through 1999.
Even though Solarex wanted to remain in Maryland, it would have moved to Virginia without the Maryland loan package, according to Harvey Forest, president and chief operating officer of Solarex.
"We would have been under significant cost pressure to compete with manufacturers who have relocated to Virginia," he said. The Maryland loan package saves the company about $1 million when compared to conventional financing, he said.
While the Maryland package was not as generous as the Virginia plan, Mr. Forest said a move would have incurred high relocation costs and disrupted production.
The offer from the state includes a $2 million 2 percent loan from DEED's Maryland Industrial and Commercial Redevelopment Fund and a $1.7 million interest-free loan from the Maryland Energy Administration. Both loans are for seven years with no payments due for five years.
The DEED loan must still be approved by the city of Frederick and Frederick County, Ms. Howell said. The state Energy Administration loan must be approved by the Maryland Board of Public Works. Both sets of approvals are expected.