Governor Ted Strickland upbeat on solar job growth

Norm Johnston, with one of his fi rm's solar panels at its Perrysburg plant, says the governor hasn't moved quickly enough to create a market in Ohio. THE BLADE/DAVE ZAPOTOSKY Enlarge | Photo Reprints

Enlarge

Second of three parts

COLUMBUS - Lisa Patt-McDaniel hopped onto a plane headed for Anaheim, Calif., in October for the Solar Power International Conference.

As the director of Ohio's Department of Development, Ms. Patt-McDaniel said she used the trip to speak with about 20 solar energy company executives and attempted to persuade them to make their products in her state.

"I have to be honest. When the companies first heard where I was from, they'd say, 'Ohio? What are you doing here?'" Ms. Patt-McDaniel said.

But when she highlighted the state's new policies toward renewable energy, the millions of dollars Ohio has set aside to retrain workers in solar technology, and, yes, the photovoltaics research at the University of Toledo, she said those executives changed their tune.

Ms. Patt-McDaniel and her boss, Ohio Gov. Ted Strickland, count prominently among the state officials who expect real job growth in the solar industry in Ohio in 2010, especially in this corner of the state.

In separate interviews, Mr. Strickland and Ms. Patt-McDaniel agreed with a Blade investigation that shows solar companies are creating manufacturing jobs in other states because Ohio's incentives and tax structure are not competitive. But they also insisted that changes are in place to correct that problem.

Ms. Patt-McDaniel said the state is in serious negotiations with three international solar companies to establish manufacturing operations in Ohio - with northwest Ohio as a possible location - and is hopeful deals will be announced this year.

The Strickland administration believes those interested solar companies, not to mention the continued progress of homegrown operations such as First Solar Inc. and Xunlight Corp., are clear indicators of the work the governor has done to make Ohio a future player in the highly competitive solar industry.

But some industry insiders - including a local executive - say the governor and his staff have not done enough to create an attractive market for solar companies to move to Ohio, thus costing laid-off factory workers jobs that will end up elsewhere.

Podiums, news conferences, and photographed handshakes announcing deals with solar companies will go a long way toward proving the Strickland administration correct in this debate - handshakes the administration more anxiously awaits with each passing day.

A Spanish connection

Lucas County is believed to be one of three Ohio locations that Spanish solar panel manufacturer Isofoton is considering for a U.S. assembly plant that potentially would employ about 350 workers.

Neither the state nor an Isofoton spokesman would confirm that Lucas County is a finalist for the plant's location, but both sides say the ongoing research, development, and production of solar technology and solar panels in this region are selling points for the entire state.

Isofoton officials have toured the University of Toledo's solar research laboratories, and the company is keenly aware of the region's history in making glass and automobiles.

"Ohio has all the right ingredients," said Michael Peck, a member of the Isofoton North America team working to select a U.S. manufacturing location. "We think this state has gotten closer than others to creating a real, credible solar cluster evolving from state policies and the glass manufacturing industry."

On March 5, 2009, Isofoton Chief Executive Officer Javier Gorbea signed an agreement not to finalize a deal with any other state while Ohio officials pursued cooperation from utility companies to buy a certain number of megawatts produced by Isofoton systems.

Mr. Strickland said he has kept in regular contact with Isofoton and recently arranged what he described as a positive meeting at the governor's mansion between the Spanish firm and executives from Ohio's utility companies.

"My interaction [with solar companies] has been rather positive," Mr. Strickland said. "They are looking very, very seriously at major solar panel production investment in Ohio. They could be looking anywhere else, but I can tell you they are looking in Ohio."

Indeed, the Strickland administration believes Ohio - and particularly Toledo - is building great momentum in the solar industry after a lull.

In addition to Isofoton and the two unnamed companies that Ohio officials are negotiating with, solar-powered bright spots for Mr. Strickland include:

•Xunlight, a University of Toledo spin-off firm specializing in flexible, lightweight solar panels.

The firm has received millions of dollars from the state over the last eight years, was handed about $8 million in loans and tax credits last year, and employs about 120 people. That number is expected to grow by the hundreds if the company receives necessary certification of its products from Underwriters Laboratories this spring.

•Willard & Kelsey Solar Group LLC of Perrysburg, which has received about $6 million in state loans and tax credits and was awarded a $10 million competitive loan from the Ohio Air Quality Development Authority that the company says it hasn't drawn from yet.

The solar panel firm expects to go from 60 to 200 employees by July - when it plans to begin production - and is predicting it could have 1,000 employees in two years.

•The Midwest's largest solar installation - a 10-megawatt system - is being built with 160,000 First Solar panels on a farm field near Wyandot County's Upper Sandusky, 75 miles south of Toledo.

•The phasing out of corporate taxes, mandates for solar-generated electricity, tax credits for job creation, and consumer grants for solar system installation will usher in even more growth for Ohio in the solar industry, according to Strickland administration officials.

"It's like a perfect storm," Ms. Patt-McDaniel said, "and I think it is starting to rain."

Local solar executive Norm Johnston, however, doesn't quite see the need for an umbrella.

Mr. Johnston, chairman of the nonprofit group Ohio Advanced Energy, vice chairman of Germany's Calyxo GmbH, and chief executive of its North American subsidiary, said Mr. Strickland is to blame for Ohioans not having thousands more jobs in the solar industry right now.

He said the governor hasn't moved quickly enough to create a market for solar panels in Ohio and has left the door open for German and Chinese companies to sell their products here once more customers begin buying solar panels.

"While our industry has received excellent help from [U.S. Rep.] Marcy Kaptur, we've received mediocre help from Ted Strickland," Mr. Johnston said.

His primary complaint is the Strickland administration's rejection of his $750 million proposal to build 30 solar fields - each capable of producing at least 10 megawatts of electricity - on cleaned-up industrial sites throughout the state.

The plan, put forth by Ohio Advanced Energy, included an estimate of 1,500 jobs immediately and called for the project to be funded by federal stimulus dollars, state-issued bonds, and other methods.

Mark Shanahan, Mr. Strickland's chief energy adviser, said Mr. Johnston's proposal didn't move forward because it asked for too much buy-in from the state and didn't include enough private investment.

"The state cannot go in all by itself on a project," Mr. Shanahan said. "We never go in alone. We always have to have partners, and at least part of them have to be private-sector partners. … His project didn't meet any of our criteria."

Mr. Johnston said solar companies will continue building manufacturing plants in other states until Ohio does more to entice those companies to come here.

"I don't know that we've ever failed to sit down with a viable [solar] company that has a viable business plan in place," Mr. Strickland said. "I think we have bent over backward to try to help legitimate companies with legitimate plans and realistic expectations of what they can expect from us."

While proud of his work to advance solar and other renewable energy industries in Ohio, Mr. Strickland admits there is more work to be done. He cites the state's tangible property tax on public utilities as an obstacle to economic development and only recently has seen movement in the legislature toward removing it from the books.

Some solar company executives and others outside the Strickland administration say the state's renewable portfolio standards have been slow to create jobs or a market for solar energy and may take years to function as hoped.

The governor and his staff insist utility companies are on board and the market will quickly take shape in Ohio.

There is also the chance that the bets the state has made on local companies won't pay off.

Willard & Kelsey, for instance, is well behind the state's estimate of jobs created despite millions of dollars in support. Both the company and Mr. Strickland contend the broader national economic struggles have hindered growth.

"We will expand in July," said Michael Cicak, Willard & Kelsey's chief executive officer. "Our future expansions can only be deterred by future markets."

Contact Joe Vardon at:

jvardon@theblade.com

or 419-724-6559.

42.64473 -92.2882

Michael Cicak of Perrysburg's Willard & Kelsey, left, who met with state Treasurer KevinBoyce, center, and Gov. Ted Strickland last month, says his firm will expand in July. JETTA FRASER Enlarge

Lisa Patt-McDaniel hopped onto a plane headed for Anaheim, Calif., in October for the Solar Power International Conference. As the director of Ohio's Department of Development, Ms. Patt-McDaniel said she used the trip to speak with about 20 solar energy company executives and attempted to persuade them to make their products in her state. "I have to be honest. When the companies first heard where I was from, they'd say, 'Ohio? What are you doing here?'" Ms. Patt-McDaniel said.