SpectraWatt, the Intel solar cell spinoff, is moving its headquarters to New York, where it also plans to build a factory in a shell that local sources say is owned by IBM.

It hopes to roll out its first solar cells early next year.

Generous tax, grant and other incentives that New York and the local government offers are key reasons for the move to the Hudson Valley Research Park in Hopewell Junction, said Andrew Wilson, CEO of SpectraWatt Tuesday. The company is currently headquartered in Hillsboro, Ore., near an Intel campus, and the startup had trouble lining up financing to build the factory in Oregon, reported the Oregonian earlier this year.

SpectraWatt has land in Oregon for the factory, but it would've had to build the factory from the ground up if it had decided to stay put. The space in New York, on the other hand, is a former chip factory. The company can get more for its money by retrofitting the factory, and it can draw from a local pool of skilled tech workers, Wilson said.

"The whole package was more attractive for SpectraWatt to be in New York," Wilson said. He declined to disclose the costs of setting up the factory. "We decided that we can do this in a much more efficient way by pursuing this strategy" rather than building a factory from scratch.

New York has also been one of the more aggressive states in the country over the past decade in wooing semiconductor makers and nanotechnology specialists. The push began under former Governor George Pataki. 

Wilson said a confidential agreement is preventing him from disclosing which chip company had used the factory space that SpectraWatt is leasing. Citing unnamed sources, the Poughkeepsie Journal in New York reported that SpectraWatt is moving into one of the IBM buildings at the research park.

IBM, which has a large chip R&D and manufacturing center at the research park, still makes chips there, said IBM spokesman Jeff Couture. IBM also leases out space to other companies, including semiconductor maker NXP.

SpectraWatt is setting up its first production line that would have the capacity to produce 60 megawatts of multicrystalline silicon solar cells per year. The company said it would like to add another 60 megawatts in capacity at the same location within about two years. SpectraWatt is focusing on making solar cells and selling them to panel makers.

The company has already signed a multiyear sales contract with a customer who expects to take delivery of most of the production from the first 60-megawatt line, said Wilson, who declined to name the customer.

Wilson said the company decided not to pursue panel making now because it would require additional capital and efforts to set up a distribution channel.

"We didn't want to take on too many unnecessary risks," he said.

SpectraWatt was born inside Intel, the world's largest chip maker headquartered in Santa Clara, Calif. Intel started developing the business plan for nurturing a solar cell startup in 2004, Wilson said. Intel announced the spin-off in June last year. The chip maker also was the lead investor in a $50 million round that also involved Cogentrix Energy, PCG Clean Energy and Technology Fund and Solon.

At the time of the investment announcement Solon, a solar panel maker and power plant developer based in Berlin, referred to SpectraWatt as a "strategic partner" for "expanding the company's supplier base" in a statement.

While SpectraWatt sets up its factory, it plans to keep its research and development team at its current space in Oregon for another nine to twelve months, Wilson said. The R&D staff is currently working on projects that require them to stay put until the company completes setting up its new headquarters in New York, he added.

SpectraWatt is developing multicrystalline silicon cells, and it aims to start producing cells that could convert 16 percent of the sunlight that hits them into electricity, Wilson said. Most of the solar panels on the market today contain cells made with silicon.

Diving into a popular technology market means SpectraWatt is competing against a whole host of large solar cell makers as well as startup companies. Key competitors include pure solar-cell makers such as Q-Cells, as well as solar panel makers who produce their own cells, such as Suntech Power Holdings in China.

Wilson was mum about SpectraWatt's strategy to compete, saying that "it will become clear as we roll out long-term strategies and efficiency improvements." 

Join industry leaders and influencers at Surviving the Shakeout: Greentech Media’s 2009 Solar Industry Summit in Phoenix, Ariz., April 14–15.