Bloom Plays the Location Game

As regular readers here know, I’m no fan of the location game.

State and local governments play this game to bugger one another for “jobs,” promising tax breaks that assure a new plant’s costs will be minimal, hoping to take their cut later from the workers’ checks.

It reminds me of the 1950s musical “The Music Man,” where a man who doesn’t know music sells a town a set of band uniforms and instruments. Or the classic re-make by The Simpsons, Marge vs. the Monorail (written by Conan O’Brien).

But as long as governments choose to play it, and politicians get re-elected for playing it, companies that play it better make good investments.

Bloom Energy is now playing the game with Delaware. The state is planning a huge package of incentives, including redeveloped land, an assured market in the local utility, and $11.2 million in direct aid, to lure a Bloom plant to an old Chrysler plant site.

Personally I agree with those who call the company over-hyped.  It’s not really green at all – Bloom cells are hard to make and they actually run on natural gas. The greenest thing about the Bloom Box may be the color of some of the materials used in making it.

Still, Bloom is selling in the fuel cell market, mainly a back-up to existing systems or new renewable installations. It has begun expanding its international sales force. It’s a real company.

But is it worthwhile for each of the local power utility’s customers to see a $1 per month price hike in order to bring in about 900 jobs for a technology that could easily be rendered obsolete and uses fossil fuels anyway?

House Speaker Robert Gilligan told reporters the deal is “the Delaware way.” Hey buddy, whose political neck goes on the chopping block if this blows up in five or ten years? Or if a better, greener business deal comes along and your taxpayers are tapped-out?

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Dana Blankenhorn has covered business and technology since 1978. He covered the Houston oil boom of the 1970s, began making his living online in 1985, and launched the Interactive Age Daily, the first daily coverage of e-commerce, in 1994. He has written for a host of off-line and online publications including The Chicago Tribune, Advertising Age, and ZDNet. He has covered PCs, networks, telecommunications, cable technology, Internet commerce, the Internet of Things, Open Source and Health IT, He began covering alternative energy at his personal blog, Danablankenhorn.com, in 2007.

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