Iron Range solar plant wants state loan for expansion
The last company making photovoltaic electric solar panels from scratch in Minnesota is asking for public financial help in expanding to add 50 jobs in Mountain Iron.
Ontario-based Heliene Inc. is asking for $3.5 million in government-backed loans — $1.75 milion each from the Iron Range Resources and Rehabilitation Board and the state Department of Employment and Economic Development.
Up to $1 million of the loan would be forgiven if the company meets the terms of the agreement, namely that it employs 70 people in Mountain Iron within four years.
IRRRB members are expected to approve the loan Wednesday in Eveleth.
It's the second generation for the Mountain Iron facility which started in 2011 when Seattle-based Silicon Energy expanded to Mountain Iron. That company never fulfilled promises to employ dozen of workers, however, instead battling competition from cheap foreign-made panels and struggling to keep a half-dozen workers on the site.
Silicon dissolved as a company and abandoned the plant early last year. Heleine moved in to the plant and, with six employees in Mountain Iron, ran the operation to its largest production year yet, said Heliene owner Martin Pochtaruk. The plant produced some 300,000 solar panels under Heliene in 2017.
But Pochtaruk said the plant's manufacturing equipment is already outdated and that he needs to add an entirely new solar-panel production line in the facility. Pochtaruk will front $5.2 million of the total $8.7 million project. He hopes to have the new line up and running by April, with multiple shifts of 12 or more employees. Average wages will run from about $30,000 to $60,000 annually, plus benefits.
The city of Mountain Iron continues to own the building itself and will lease it to Heliene.
Pochtaruk says he can succeed where other North American solar-panel makers have failed. His company grew to $95 million in revenue in 2017 and employs about 80 people in Sault Ste. Marie, Ont. where it's entering its eighth year of operations.
Solar electric capacity in North America "is going to keep growing and we think we can compete for the growth," Pochtaruk said, noting the company almost exclusively targets large-scale solar for commercial-industrial installations and solar farms, often owned by utilities. "We're local. We can do things that the big Asian companies don't, like delivering directly to construction sites. ... And we have many customers who are buying based on quality and not just price."
Steve Peterson, IRRRB executive director of development, said the agency's technical advisory panel — which recommends which business loans and grants to approve — toured the Ontario facility recently with IRRRB staff.
"They (Heliene) seem to run a very good operation. We met with their (Sault Ste. Marie) economic development people and they like what they've seen," Peterson said. "There's risk involved. But we think he has a good niche of the market. We think it's a risk worth taking."
While Heliene has been growing, other U.S. and Canadian photovoltaic panel makers have dropped dead in the past two years. In addition to Silicon Energy dissolving, Twin Cities-based Ten K Solar closed in May after employing as many as 90 people in recent years. In St. Paul, Simple Ray Solar LLC closed after less than a year assembling solar panels. Nationally, big solar panel makers like SunPower, First Solar, Sungevity, Beamreach and SunEdison have closed, filed for bankruptcy or had layoffs.
They failed as the U.S. imported nearly $8.1 billion worth of solar panels in 2016, U.S. government data shows, nearly 38 percent more than 2015. The imports — mostly from China, Malaysia, Vietnam and Thailand — have spurred a cry for protection not unlike that of the domestic steel industry. Bankrupt Georgia-based Suniva filed a trade complaint in April seeking new import tariffs on all foreign-made solar cells.
President Donald Trump on Monday approved recommendations to impose four years of safeguard tariffs on imported solar cells and modules, according to a statement from U.S. Trade Representative Robert Lighthizer.
This domestic demise of solar manufacturing is confusing because it's happening even as the nation rushes toward more solar energy. In the first quarter of 2017 the U.S. added 4 million gigawatts of solar capacity, hitting nearly 45 million gigawatts total — more than double a few years ago and enough to power 8 million homes.
The Mountain Iron plant has been heavily publicly subsidized since its inception. It was built in 2011 with a $1.5 million loan to Silicon and a $3.6 million loan to the Mountain Iron Economic Development Authority, which continues to own the 25,000-square-foot facility and will lease it to Heliene. The city makes payments to the IRRRB only then the building is occupied.
The former owner of the former Silicon Energy is current making payments on a $1.5 million loan, Peterson said, even as his company dissolved, after personally signing on as a guarantor to the loan.