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A tractor drives past a solar panel in Germany. JOHN MacDOUGALL/AFP/Getty Images) (JOHN MACDOUGALL/AFP/Getty Images)
A tractor drives past a solar panel in Germany. JOHN MacDOUGALL/AFP/Getty Images) (JOHN MACDOUGALL/AFP/Getty Images)

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Canadian firm makes hay while the sun shines - in Germany Add to ...

To that list, Marcus Breitschwerdt adds an openness to adapting. The German president of Mercedes-Benz U.K. and who formerly led the firm in Canada, said "There is this capacity of German decision-makers to look around and to openly take the best from wherever they find it," he said in an interview from Stuttgart. "They are people who support a really open exchange of talent, resources, trade and commerce."

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It's fair to say that Arise owes its manufacturing success to Germany.

When it started out, Arise didn't have a penny of profits or revenue (it is still losing money) because it had no factory. Its first big break on the factory front came in March, 2006, when a German PV magazine carried a story on Arise. It was read by the Germany Trade & Invest team, which decided the ambitious little Canadian company should put down roots in Germany. It tracked down Mr. MacLellan at a PV conference in Hawaii two months later and made its pitch.

The German government agencies had a lot to offer. The biggie was a €25-million ($35-million) grant to cover half of the factory's construction cost. But that's not the only reason Arise chose Germany, Mr. MacLellan says.

The other selling points were help in site selection, an educated work force that did not demand outrageous incomes and, crucially, construction expertise. "We built the factory in eight months," he says. "The Germans understood what we wanted because they had built so many PV factories before."

Germany's cornucopia of incentives have created the world's biggest PV market, measured by installed capacity. (In 2010, Italy and the Czech Republic ranked second and third, with China taking 10th spot.) Germany Trade & Invest says the PV industry invested €19.5-billion in Germany in 2010 alone and that the PV makers located there had sales of €12.2-billion that year. Industry employment reached 107,800 in 2010.

Some of the industry's biggest players - Sovello, First Solar and Sunfilm, among them - have set up shop in Germany. Arise makes all its PV cells in Germany and has no plans for a Canadian PV factory. Its total PV cell production has reached 25 million units, valued at $150-million, over three years.

For the solar industry, Germany may not be sunny forever. There is no doubt the generous "feed-in tariff," the main German subsidy for renewable energy generation is, by design, coming down and will eventually be eliminated. Its phase-out could make Germany a less attractive market for solar energy installations, and hence solar energy companies. The industry hopes that falling subsidies will be more than offset by falling manufacturing costs.

Austerity programs could trim construction grants, like the ones used by Arise to build its PV factory. Finally, China is coming on strong. It is using financial incentives and the lure of inexpensive labour to attract PV companies. Mr. MacLellan says Germany could lose its competitive advantage to China, though he says the "Made in Germany" label gives any product a competitive advantage, allowing it to snag a premium price.

Arise has no plans to leave Germany, however, and its expansion is testament to its loyalty. After all, Germany gave Arise a manufacturing presence that it couldn't build at home.

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