Midwest Emerges as Center for Clean Energy

By KEITH SCHNEIDER for New York Times

CIRCLEVILLE, Ohio — With surprising speed, and with the help of ample public incentives, a solar energy manufacturing center has emerged in the upper Midwest that is helping to supply the world’s growing demand for clean power.

Here in this central Ohio city of 13,400 residents, DuPont is building a $175 million, 162,000-square-foot solar materials plant that will employ 70 people.

About 320 miles north, near Midland, Mich., Hemlock Semiconductor is completing a $1 billion polycrystalline silicon plant to supply a basic raw material in the manufacture of solar photovoltaic cells, which convert sunlight to electricity. The Hemlock plant will add 300 new jobs by the end of the year.

In between the two plants are six more new solar facilities in Michigan and three others in Ohio.

A number of conditions in the Midwest have allowed the sector to flourish. The upper Midwest has a history of advanced manufacturing, and machined parts and many of the basic materials of photovoltaic panels — polycrystalline in central Michigan, glass in the Toledo region, plastic films in Ohio — were already being made in the region.

Both states have an abundance of shuttered plants that can be readily converted to new uses and are close to highway, rail and shipping supply lines in the center of the country.

Equally important, both states have an army of unemployed or underemployed skilled manufacturing workers.

The new DuPont plant, part of which encompasses a facility that was idled in 2009, is expected to open next year.

“Frankly, an even bigger challenge we’ve had is to invest quickly enough to keep up with market demand,” said John Odom, global business director for DuPont Photovoltaic Fluoro Materials.

This year the world will generate 38,000 megawatts of energy from the sun, 14,000 megawatts more than last year, according to a number of market research firms. The growth in the industry’s generating capacity is equivalent to 14 large coal-fired power plants. In comparison, in 1997 global demand for solar photovoltaic equipment totaled just 125 megawatts. Sales of photovoltaic cells and panels will reach $24 billion in 2010, according to the European Photovoltaic Industry Association.

Much of that market is supported by incentives in the United States, Europe and Asia to build and install photovoltaic equipment. DuPont received $50.1 million in federal manufacturing tax incentives from the American Recovery and Reinvestment Act of 2009. It also gained $7 million in state aid.

Michigan has leveraged the 2009 federal stimulus bill and an array of state manufacturing incentives, tax credits and other public aid to produce $4.1 billion in public and private investment in the state’s solar manufacturing industry in the last three years, said Gregory Main, the chief executive of the Michigan Economic Development Corporation, a state agency.

In a national census of solar industry employment released last month, the Solar Foundation found that with 6,300 jobs, Michigan ranked fourth in solar sector jobs behind California, Pennsylvania and Texas. The Ohio Department of Development counts 1,500 jobs in its solar manufacturing sector.

Toledo, Ohio, has become a center for the production of flexible sheets of photovoltaic cells called thin film that were developed from research programs at the University of Toledo. The sheets combine layers of hair-thin semiconductors with nonsilicon materials to generate power.

First Solar just finished a 500,000-square-foot, $141 million addition to its existing photovoltaic thin film plant in Perrysburg, a Toledo suburb. The company, awarded a $16 million federal manufacturing investment tax credit, added 200 workers, bringing the plant’s employment to 1,100.

Early next year, the Willard & Kelsey Solar Group plans to start production in a 280,000-square-foot, $250 million thin-film plant in Perrysburg that will employ 100 people and that was built with nearly $20 million in state support.

Michael J. Cicak, the company’s chief executive and chairman, said that the company had already sold out all its production from the plant and added that Willard & Kelsey was looking 50 miles north to Tecumseh, Mich., for a second manufacturing plant.

In Michigan, a center for solar industry is emerging in the Saginaw Valley around Hemlock Semiconductor’s polycrystalline silicon plant, which involves constructing multiple facilities on a 500-acre site. It is being built with the help of a $350 million state energy tax credit, Mr. Main said.

Nearby in Midland, Dow Solar, a unit of Dow Chemical, plans a $249 million photovoltaic plant to make residential solar shingles, which generate electricity while serving as a conventional roof. The plant, which will open next year, was built with $17 million in federal manufacturing tax credits, and $123 million in various state aid programs.

More plants are on the way, Mr. Main said. Clairvoyant Energy last year committed to a partnership with the Ford Motor Company to install a solar manufacturing facility in a shuttered Ford auto assembly plant near Detroit.

But an industry that relies on government incentives and assistance is also vulnerable to the winds of political change.

This fall, for instance, the value of Ohio’s public incentives and two-year-old state legislation to support solar and other clean energy manufacturing became an issue in the tight governor’s race. The incumbent, Ted Strickland, a Democrat, argued that state grants, loans and tax incentives in the last three years helped to prompt nearly $750 million in new solar investment in Ohio and hundreds of new jobs.

But his Republican challenger, John Kasich, who on Nov. 2 defeated Mr. Strickland, said that Ohio’s 2008 clean energy standard, which requires utilities to produce 25 percent of their electricity from solar and other “advanced sources” by 2025, would raise costs and was a government intrusion. “You can‘t mandate invention,” Mr. Kasich said.

Three weeks later in Washington, the United States Trade Representative’s office announced it would investigate Chinese government support for makers of solar, wind and other clean energy products that compete with similar equipment now made in the Midwest. Chinese officials responded that the investigation could set off an trade battle that the United States could not win.

Solar industry analysts said that a confrontation with China could hit DuPont hard. The company’s new plant will manufacture Tedlar, a durable plastic film used to protect solar photovoltaic panels from moisture and ultraviolet radiation.

Most of the Tedlar produced in Ohio will be sold to producers in China, who are now making half of the solar photovoltaic panels in a global market that is growing 30 percent annually.

In both states, solar executives and political leaders expressed concern that the Democratic lawmakers both states sent to Washington, as well as the governors of both states that helped the solar initiatives had been replaced by Republicans who had expressed skepticism about publicly financed incentives.

Rob Nichols, a spokesman for Governor-elect Kasich, said Mr. Kasich did not oppose Ohio’s renewable energy standard and would not seek to repeal it.

“I know some people have said some negative things, but I suspect that we will continue to pursue alternative energy production,” said Mr. Main of Michigan’s development agency. “The track record in job growth has been so strong in our state. I can’t imagine us walking away.”


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