Milwaukee solar industry still shining

A $525 million federal loan made to failed California solar panel manufacturer Solyndra has cast widespread doubt upon the solar industry, but Milwaukee solar companies are quick to distance themselves from the scandal.

Milwaukee-based Helios USA LLC, located at 1207 W. Canal St. in the Menomonee Valley, was incorporated in February 2009 and began producing solar panels in February 2011. The company purchases solar cells and then manufactures mono-crystalline photovoltaic solar panels.

Solyndra manufactured panels using a newer technology – thin film – that has not been proven like crystalline has over the past 25 years, said Helios general manager Brent Brucker.

“(Crystalline solar panels are) more efficient per square foot than any thin film, so it traps more sunlight, converts more of that sunlight to electricity,” Brucker said. “It’s also more of an established technology.”

Solyndra, which closed in September, and Evergreen Solar, a Massachusetts crystalline solar panel manufacturer that failed in August, had very specific technologies that were not standardized in the industry, Brucker said.

“When you’re a lone wolf out there, it’s all on you to get your costs under control,” he said. “I think us and other crystalline manufacturers are picking up Solyndra’s projects, but I don’t think their collapse caused any sort of reverberation around the industry.”

Steve Ostrenga, CEO of Helios, is a self-described solar evangelist who introduced about 20 people to the company on a Milwaukee Solar Tour in September. Thin film makes up about 15 percent of the solar market, while crystalline manufacturers have the rest of the market share, he said. The price of the silicon used to make crystalline has dropped dramatically in the last several years, which has put that technology ahead, but the U.S. government is investing in thin film companies like Solyndra.

“(Solyndra) lost because our modules are made of crystalline,” Ostrenga said.

Caleffi Hydronic Solutions has been manufacturing solar water heaters for about five years at its Menomonee Valley location, 3883 W. Milwaukee Road. The 50-year-old Italian company opened its U.S. location 10 years ago and got into the solar market because it already manufactured a lot of the radiant heat products used in solar water heaters, said Rex Gillespie, director of marketing and an original U.S. shareholder.

“In the past, Europe has been a really strong solar market because traditionally their energy costs are higher,” he said. “But then five years ago when the incentives came back on solar, it kind of revived the industry.”

While Caleffi’s solar business saw a drop about a 40 percent drop in demand during the Great Recession, it has nearly returned to pre-2008 levels.

Gillespie, who last year started the Wisconsin Solar Energy Industry Association, agreed that Solyndra’s case was a unique one in the solar industry.

“Solyndra, they were trying a different technology than even what the other photovoltaic manufacturers were doing,” he said. “That was more or less one company trying to advance something that wasn’t as proven.”

Spanish solar and wind industry manufacturer Ingeteam Inc. also recently opened a location in Milwaukee’s Menomonee Valley. The $15 million, 100,000-square-foot facility opened in October and is expected to create 275 jobs by 2015. Ingeteam makes the solar inverters that help solar panels convert light to energy.

The company received $1.6 million in federal stimulus tax credits, a $500,000 loan from the state and $4.5 million in state tax credits to locate in Wisconsin.

Ingeteam opened a U.S. location because of the enormous potential for renewables here and a good market position near its suppliers, said Aitor Sotes, CEO of the U.S. subsidiary.

Sotes said the Solyndra scandal is not industry-related, and he doesn’t want one company’s bad business to affect Ingeteam’s image.

“There are not so many companies that are investing in building manufacturing facilities of our type,” Sotes said. “Using the politicization of the renewable energy is something that is worrisome.”

He expects rapid growth from the newest of the company’s 28 manufacturing facilities worldwide.

“The market has been quite slow in the last couple of years but we expect the market to pick up,” Sotes said.

The City of Milwaukee has been trying to attract more businesses such as Helios and Ingeteam with its Milwaukee Shines program. The U.S. Department of Energy’s Solar America Cities program has awarded Milwaukee Shines more than $860,000 in grants since 2008 to promote the city as a solar hub, said Amy Heart, MS solar program manager.

Milwaukee Shines has been using the funds to promote the region to solar manufacturers, train solar installers and fund installations of solar panels and water heaters at city and non-profit buildings. Solar manufacturers who locate here don’t receive any financial incentives from the program, she said.

“We actually wanted to create this sustainable local economy,” Heart said. “We may not be able to provide any (monetary) incentives, but what we do provide are the intangibles of the market and the support of the market.”

She said the Solyndra scandal isn’t a concern for the Milwaukee solar industry, since it has a long-term and stable plan.

“This is about building up strategic and strong partnerships for the long run,” Heart said. “We’re not rushing into anything. We’re not pushing companies into creating a product line.”

While Solyndra’s downfall isn’t likely to affect Milwaukee’s solar manufacturers, a reduction in aid from the state’s Focus on Energy program could be a problem, said Heather Kohls, adjunct associate professor of economics at Marquette University.

Kohls, who teaches an environmental and natural resource economics course, said government funding is important to help establish the solar industry.

“Solar panels need to be mass-produced to be cheap enough for everybody to buy them,” she said. “Consumer demand is needed to increase mass production, and that won’t happen until the cost comes down. In order to break the cycle, we need some form of external influence.”

She said solar energy will likely be priced competitively with traditional energy sources within 15 years, and solar manufacturers will see an influx of interested utility companies – and acquisitive manufacturers.

“I suspect that when (solar manufacturers’) future really starts to look bright, they end up being absorbed by bigger fish in the pond,” she said.

Sign up for the BizTimes email newsletter

Stay up-to-date on the people, companies and issues that impact business in Milwaukee and Southeast Wisconsin

No posts to display