Solar energy industry brings a ray of hope to the Rust Belt
At a recent solar energy conference in Anaheim, economic development officials from Ohio talked up a state that seemed far removed from the solar panels and high-tech devices that dominated the convention floor.
Ohio, long known for its smokestack auto plants and metal-bending factories, would be an ideal place for green technology companies to set up shop, they said.
“People don’t traditionally think of Ohio when they think of solar,” said Lisa Patt-McDaniel, director of Ohio’s economic development agency. But in fact, the Rust Belt goes well with the Green Belt, she said.
In years past, Sunbelt governors recruited Midwestern businesses to set up shop in their states, dangling tax breaks and the lure of a union-free workforce.
Now the tables have turned as solar start-ups, wind turbine companies and electric carmakers from California and the Southwest migrate to the nation’s industrial heartland. They’re looking to tap its manufacturing might and legions of skilled workers, hit hard by the near-collapse of the United States auto industry and eager for work.
For all of green tech’s futuristic sheen, solar power plants and wind farms are made of much of the same stuff as automobiles: machine-stamped steel, glass and gearboxes.
That has renewable energy companies hitting the highway for Detroit and Northeastern industrial states, driven in part by the federal stimulus package’s incentives and buy-American mandates.
Irvine’s Fisker Automotive, for instance, will manufacture its next plug-in electric hybrid car at a defunct General Motors assembly plant in Wilmington, Del.
And Stirling Energy Systems, which is building two massive solar power plants in Southern California, has signed deals with two automotive companies to make components for its giant solar dishes.
Stirling’s 40-by-38-foot SunCatcher resembles a mirrored satellite dish. The SunCatcher’s mirrors focus the sun on a Stirling engine that sits on an arm that extends from the center of the dish. The heat causes hydrogen gas in the engine to expand, which drives pistons that generate electricity.
“The back of the mirror facet is a piece of stamped metal, and if you raise the hood of your car, what you see is a stamped metal frame,” said Ian Simington, chief executive of the solar division of NTR, the Irish company that owns Stirling Energy Systems, based in Scottsdale, Ariz. “Nobody stamps metal better than automotive manufacturers. So in a sense the choice to go to high-volume suppliers in the greater Detroit area was an easy one for us.”
Stirling signed an agreement with Tower Automotive to manufacture the dishes’ structural components and assemble the mirror facets. The Livonia, Mich., company makes vehicle body parts and other components for the major carmakers but has seen auto orders slow with the downturn.
Jim Bernard, Tower’s vice president of North American sales and program management, said the company had been looking to diversify its operations.
“The market that we thought would fit us was alternative energy,” he said. “Utility-scale alternative energy projects have some of the exact same requirements that our automotive customers do.”
That means Tower can use its existing machinery, with some modifications, and workforce to make SunCatcher components. In turn, Stirling avoids the capital costs of setting up its own factories and gets to tap Tower’s manufacturing know-how to bring down its costs, which will be a key competitive advantage in the race to deploy new solar technologies.
“They have the practices beaten into them since Henry Ford, but more because of Japanese competition, to be able to do several things simultaneously -- improve the features of the product, take cost out and improve quality,” Simington said.
He said his company has spent $30 million to $40 million in the Detroit area over the last year and hired 40 to 50 people from the automotive industry. Stirling has also outsourced the manufacturing of specialized tools to companies in Ohio, Illinois and Indiana.
About 25,000 SunCatchers will roll off the assembly line annually once production ramps up.
It’s still something of a buyer’s market these days, said Jeff Collins, Stirling’s vice president of global supply chain and an auto industry veteran.
“I hate to say this, particularly as a guy who still owns a house in Detroit, but the downturn in the automotive market corresponded exactly with our requirements,” he said. “We’re not adding our own factories to scale up; we’re just adding a second shift on the assembly line.”
That available manufacturing muscle attracted Skyline Solar, a Silicon Valley solar power plant builder. In October, the start-up announced a deal with a Troy, Mich., subsidiary of automotive giant Magna International to make the long metal arrays that hold its photovoltaic panels.
“Renewable energy trends and forecast data suggest significant growth potential for this market. We expect to participate in this growth potential,” Magna spokeswoman Tracy Fuerst said in an e-mail.
Back at Ohio’s booth at the solar conference, Patt-McDaniel said Michigan was her biggest competitor for solar manufacturing projects.
Her state secured one of the biggest solar companies, First Solar of Tempe, Ariz., to produce photovoltaic modules in Ohio. Patt-McDaniel said wind turbines are already made in Ohio, and Rolls-Royce recently announced it would consolidate its fuel cell operations in the Buckeye State.
“We’re open to anything and everything,” she said.