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A German solar technology company's plans for a massive Albuquerque manufacturing plant left local officials buoyant over its potential.

Schott Solar's proposed plant at Mesa del Sol could one day grow from an initial 350 jobs to 1,500, making it the state's third-largest private employer.

But the company, as well as other experts in the solar energy industry, caution that such growth will hinge on cooperation from the federal government, particularly the extension of a key tax credit set to decline substantially this year.

"When we say the facility is projected to grow up to 1,500 people and all the numbers we gave, one of the key things we need to have happen is the support from the federal government to keep the industry growing," said Brian Lynch, a spokesman for Schott North America, one of the subsidiaries of Schott AG of Mainz, Germany.

Congress in 2005 passed a tax credit for companies specializing in solar power systems. The credit, which amounts to 30 percent of the value of qualified residential or commercial solar equipment, is set to revert to 10 percent at the end of 2008.

The energy bill signed last month by President Bush came without an extension of the credits, something industry experts say is necessary to continue a resurgence in solar energy that was in large part sparked by the tax credits.

Monique Hanis, a spokeswoman for the Solar Energy Industries Association, said the solar energy industry was projected to grow by 50 percent in 2007, but instead grew to around 70 percent.

"We predict that same growth for next year with it falling off in the second half if they don't extend that tax credit," Hanis said.

U.S. Sen. Jeff Bingaman, a Silver City Democrat and chairman of the Senate's Energy and Natural Resources Committee, was at the Roundhouse while Schott announced its plans Monday.

He said he hopes to push forward this year with a plan to extend the tax credits.

While the solar industry is seeking eight years, Bingaman said he would at least seek a four-year extension.

U.S. Rep. Heather Wilson, an Albuquerque Republican who also was at the news conference, said she would join in that fight.

Lynch, the Schott spokesman, said such federal incentives help the company control costs and make the technology it will produce in Albuquerque more viable.

Schott plans to break ground next month on a 200,000-square-foot facility - an initial $100 million investment that will employ 350 people. The plant will build receivers for concentrated solar thermal power plants and 64 megawatts worth of photovoltaic modules.

"These are the kinds of high-wage jobs we want here in New Mexico," said Gov. Bill Richardson.

The manufacturing plant is expected to be open in 2009. As the market grows, the company hopes to increase its investment in New Mexico to $500 million, grow its plant to 800,000 square feet and employ 1,500 people.

That optimism is based upon a solar energy market that is growing by at least 50 percent a year thanks to a increasing global energy demand and rising costs of dwindling fossil fuel resources, said Udo Ungeheuer, chairman of Schott's board of management.

"In one year's time, we will have transformed the desert in Mesa del Sol to one of the largest solar manufacturing sites in the country," Ungeheuer said.

Schott, a privately held company, chose New Mexico over three other undisclosed states that were narrowed from a search that included Mexico and Canada.

It was a courtship that began six months ago with a tour of the site south of Albuquerque International Sunport, and sealed with a handshake in a hotel in Manchester, N.H., where Richardson was campaigning during his bid for president.

Mark Finocchario, president and CEO of Schott Solar, said the company was attracted to the abundance of sunlight in the Southwest as well as the state's commitment to renewable energy.

Richardson has mandated that 20 percent of the energy consumed in the state be renewable by 2020, with 4 percent of that coming from solar power.

Richardson also said he will be asking the Legislature - which opens its 2008 session today - to allocate $8 million in capital outlay money to go toward the construction of Schott's plant. He said capital outlay relay requests will be made in subsequent legislative sessions.

The company also is eligible for other state incentives, such as a high-wage job tax credit equal to 10 percent of the wages and benefits for each new economic-base job created.

In return, the state expects to see an economic impact from the plant of more than $1 billion over 20 years.

The plant will be Schott's flagship facility in the United States, and will complement its operation in Billerica, Mass., which produces 300-watt photovoltaic solar modules.

The New Mexico plant will, at first, construct similar solar modules as well as receivers that generate the power at solar thermal power plants - which operate much like steam power plants but use solar energy instead of burning fossil fuels.

The solar cells that generate power within photovoltaic modules will at first be shipped from a site in Germany, but will later be manufactured in Albuquerque, company officials said.

As its technology evolves the company hopes to expand the product line at the new plant.

Finocchario said the company plans to grow by 100 employees a year between 2009 and 2012.

"This enables us to dodge the recession," said Fred Mondragon, the state's secretary-designate for economic development. He said workers laid off at Intel's Rio Rancho manufacturing site could potentially find work at the new solar plant.

Schott's arrival is another apparent success for developer Forest City Covington, which has made the solar energy industry a target as it builds Mesa del Sol, a nearly 13,000-acre project south of the Sunport that is expected to one day be home to 37,500 homes.

Advent Solar, an upstart solar technology firm, already is operating at Mesa del Sol.

"This reinforces our mission to make Mesa del Sol a showcase for renewable development," said Mike Daly, CEO of Forest City Covington.