The wind and solar energy industry in Michigan appears ready to explode this year as European original-equipment manufacturers, flush with an increase in orders, look to diversify their supply chains, experts and company officials say.
“We are looking at a number of companies that are experiencing very significant growth. Their order book has increased substantially,” said Jeff Bocan, managing director at Farmington Hills-based Beringea LLC, a venture-capital and private-equity firm.
“There are a number of wind-turbine OEMs that are experiencing substantial growth themselves, so much that their orders are starting to tax their existing supply chain,” Bocan said. “There are so many projects coming on line, there is not enough capacity to get the turbines made.”
A survey released Tuesday illustrates the growth in Michigan’s solar and wind industry. The Chicago-basedEnvironmental Law & Policy Center found nearly 200 companies doing business in the state.
The companies, which employ about 10,000 workers, range from automobile manufacturers that are retooling to build clean-energy components to startups developing new energy technologies, the report said.
“You go back five to 10 years, and we see only a few jobs in these sectors,” said Howard Learner, the policy center’s executive director.
“Clearly, the job growth in two sectors can’t make up for thousands of jobs lost in the auto industry. On the other hand, there is clear, positive growth the last several years.”
The report found 121 solar-power supply-chain businesses with 6,300 jobs and 120 wind-power supply-chain businesses with 4,000 jobs. About 50 companies operate in both sectors.
A similar report this month found 150 companies operating in Ohio.
“There is a lot of potential for wind projects as companies seek federal incentives that will expire this year,” said Learner.
Jarrod Erpelding, a spokesman for Hemlock Semiconductor, said the solar-energy industry in Michigan also will continue to grow because of the state’s skilled workforce.
“There are a number of startup companies in the (solar energy) supply chain that will be expanding over the next several years,” said Erpelding.
Hemlock Semiconductor, founded 50 years ago, is a joint venture majority-owned by Midland-based Dow Corning Corp. Hemlock is the world’s largest producer of the polycrystalline silicon used to manufacture solar cells and modules, Erpelding said.
During the past five years, Hemlock Semiconductor has announced investments totaling $4.5 billion to add to its polycrystalline-silicon manufacturing capacity — $3 billion of which will be invested in Michigan. Most of the 1,500 additional jobs that investment is expected to create will be in Hemlock, just west of Saginaw, Erpelding said.
At Monroe-based Ventower Industries, CEO Greg Adanin said the company expects to begin manufacturing wind-turbine towers in June.
“We had a horrendous winter that has somewhat delayed us, but we are on track and have been hiring a crew of about 20 to start up later this spring,” Adanin said.
During the first year of operation, Adanin said, Ventower expects to build 250 wind-turbine towers and employ 150. The company currently employs eight people, he said.
Over the next two years, Adanin said, Ventower will increase capacity 50 percent to 100 percent, which could mean 375 to 500 towers per year in 2012 and an additional 50 employees that could be hired.
“Our customers are very cautious about what they are doing and don’t want to be too public about their plans,” Adanin said. “We are in substantive discussions with a number of well-known OEMs.”
He said Michigan has great potential to develop a solid supplier base to the wind-power industry.
“Michigan has a great potential to become a major supplier for components because we have a large workforce of skilled workers,” Adanin said.
Last year, Ventower received $2.5 million in clean-energy federal tax credits to help it build its manufacturing plant.
Steve Verbrugghe, owner of Hot Watt Solar in Harrison Township along Lake St. Clair, said his solar and wind equipment distribution company has diversified into the energy-efficiency arena the past several years.
“We were doing very well in the early 1980s. Then the federal and state tax credits went away, and there was lots of cheap energy,” Verbrugghe said. “We stayed in the business, and the industry has come back since then.”
Verbrugghe said that if more businesses and homes were equipped to generate solar or wind power, “we wouldn’t need to build more coal” power plants.
Kim Paulson, a manager at United Solar Ovanic, an Auburn Hills company that manufactures silicon photovoltaic solar panels, said the federal government needs to create a stronger policy to support the demand for solar power.
“The U.S. has the best solar resources in the world, and Michigan has more opportunities for solar power than Germany, which has the largest number of solar” power plants in the world, Paulson said.
At URV USA, a Finnish company with a plant in Eaton Rapids south of Lansing, Blaire Miller, its executive vice president, said the company is building a casting foundry for wind turbines that will create 110 jobs by the end of 2012.
“The foundry is the first one in 40 years in North America,” Miller said. “We will create another 300 to 400 jobs in the next couple years.”
The state of Michigan already has approved a Centers of Energy Excellence designation and $3.5 million in funds for URV USA. The company also will receive $4 million from the U.S. Department of Energy.
Other companies retooling, manufacturing or conducting research in alternative-energy fields include Canton Township-based Danotek Motion Technologies, Sterling Heights-based MAG Industrial Automation Systems, Loc Performance Products in Plymouth, Cole Manufacturing Systems in Rochester,Diversified Tooling Group in Madison Heights and Lansing-based Astraeus Wind Energy.
By Jay Greene, Crain’s Detroit
