Date: Monday, October 24, 2011, 5:00pm MST
Patrick O’Grady/Phoenix Business Journal

Clear Energy Systems Inc. is planning to invest about $10 million in a large manufacturing facility in the Valley for a new power generator that will run on natural gas or other low-emission fuels, and the company plans to hire about 225 people there within the next three years.

The Tempe-based company announced the move Monday, saying a deal using several incentive-based programs through the Arizona Commerce Authority and state tax credits was enough to have it expand its operations in the region.

“We expect this to be a high-tech manufacturing operation,” said Tony Carmen, the company’s CEO.

The incentive total was not clear at the time of the announcement. The contract between Clear Energy and the ACA regarding the proposal has yet to be finalized. Don Cardon, president and CEO of the ACA, said the deal would mark the first time the authority used money from a $25 million closing fund designated to push companies to commit to the state.

Using the money for Clear Energy will help keep a company in the state that fits the ACA’s target of high-tech operations, as well as developing a broader manufacturing base, Cardon said.

“The companies we’re seeking are on the front edge of technology advancement,” he said.

Founded in 2001, Clear Energy has been developing the Genesis 1000, a lightweight 1-megawatt portable generator that can be used for various applications by burning natural gas, methane from landfills, ethanol or other fuels. The generators are sold for $500,000 to $600,000 each, Carmen said.

A location has yet to be selected. The company already is gearing up hiring in anticipation of growth, and Carmen said he expects to expand from the current 14 employees to nearly 100 by the end of next year as it scales up manufacturing.

“There’s a distinct need for power generation, particularly in developing nations where they don’t have access to centralized power or a grid system,” he said.

Other applications include providing power in the wake of a natural disaster, Carmen said.

The deal was struck during a recent ACA trip to China. Gov. Jan Brewer, who also went on the trip, said developing Arizona products for a global market is being targeted by economic developers.

“These are good, stable and high-wage jobs that Arizona deserves,” she said.

Jerry Colangelo, who co-chairs the ACA board with Brewer, said the private authority — which replaced the state-run Arizona Department of Commerce — was able to consummate the deal because of its changed nature.

“It fits right into the game plan where we talk about the privatization of the Arizona Commerce Authority,” he said. “This is the type of deal we can make and make quickly.”

Barry Broome, president and CEO of the Greater Phoenix Economic Council    , said the deal was helped by recent tax credit programs passed by the Legislature and signed by Brewer. Included in those incentives are the renewable energy tax credit, which will give breaks on the number of high-wage jobs the company creates; and the more recent state competitiveness package, which was designed to help companies expand in the state.

“Now the state of Arizona is stepping up, being competitive and giving our communities the tools they need to be successful,” Broome said.

How much of those tax credit incentives Clear Energy will receive is unknown because the company will have to create the jobs and make the investment first.

The renewable energy tax credit gives breaks based on capital investment of more than $25 million for property tax breaks. The competitiveness package benefits start at $5 million of capital investment.

The company estimates the average salary for the new jobs will be $65,000 a year.