What if solar companies started building manufacturing facilities in rural parts of the US…

Several reasons this won’t happen.

  1. Appalachian energy comes from coal, and solar isn’t extremely viable there due to mountains, snow, cloud cover, etc. Producing solar panels with coal energy is taboo in the U.S.; most solar plants like to have some kind of clean-ish power source.
  2. Firms dislike spending money on training. Although firms *could* train Appalachians, there’s no reason they *should* as long as there are available qualified workers in closer areas.
  3. Culturally, Appalachian governments and stakeholders are likely to be as hostile to solar investors as solar investors are likely to be to Appalachians.
  4. Appalachia is far from most of the major markets solar panels are being sold to. It makes much more sense to locate your firm near your customer, and the lack of big population clusters in Appalachia means locating major manufacturing there isn’t necessarily very efficient.
  5. Firms tend to locate in places that corporate executives like to live or visit. That is, empirical research has found that residential our tourist amenity values *independently* predict site decisions for firms, aside from factors actually impacting profitability or labor force recruitment. For many Americans of all stripes, but especially the wealthy, the elite, the educated, and the coastal, “Appalachia” is not exciting and romantic. Saying you have to fly out to West Virginia for a business trip is not quite like saying you have to fly to New York or Singapore. Living in Pikeville is not like living in Los Angeles.

It’s possible there could be some relocations. I would love to see such mutually beneficial exchanges occur. I’m just skeptical that they will.

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