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Wednesday, Sept. 3, 2008

Can Milwaukee Become a Solar City?

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Can the red-hot market for solar panels generate green jobs for Milwaukee? Some city officials are hoping so. “We’ll be looking into whether we can build them locally,” says Ann Beier, director of environmental sustainability for the city of Milwaukee.

Beier and others want to use part of a $200,000 federal Solar City grant to fund a feasibility study. “It’s worth exploring,” she says.

The numbers are enticing. The U.S. solar market grew 57% in 2007, and worldwide demand has grown 20%-25% per year over the past 20 years. But barriers to entry are steep, and investment risky. Four manufacturing behemoths currently produce 50% of the solar energy products, or photovoltaics, sold on the planet, and the pace of innovation could leave some investors out in the cold.

“Not the U.S.A., but Germany, Japan and China are the major manufacturers,” says Niels Wolter, solar electric program manager for the Madison-based Focus on Energy Renewable Energy Program. “But solar electric technology has significant room for innovation, so there are opportunities for new businesses to enter the market.”

But innovation carries risks for any entrepreneur that doesn’t stay ahead of the curve, as today’s technology quickly becomes obsolete. “A fresh innovation could come about at any time that will make today’s solar [technology] cost-effective on every home and building in Wisconsin,” Wolter says.

For example, Department of Energy (DOE) researchers recently developed tiny nano-antennae that capture and con vert 80% of infrared radiation to usable energy. The DOE is confident that the technology, which works day and night, will be commercially available in five to 10 years.

“In some ways Milwaukee is an attractive location for this type of manufacturing. It has a large manufacturing base and talent, and it’s a port city,” Wolter says. “But sadly, solar manufacturing is not seen as a mainstream venture in the Midwest. Pulling together the right team willing to take on the monumental task is difficult. I talk to smart businesspeople all the time who see the potential, but they are too busy with other ventures.”

Investors with a lower tolerance for risk are better off building the racks that hold the panels, or the inverters that convert sunlight to alternat ing current, Wolter says. David J. Jenkins, director of commercialization and market development for

Wisconsin’s Office of Energy Independence, says his office sees more interest in wind technologies than solar.

“Some solar businesses have failed, and this does not help the industry,” he says. “It is important that new businesses in the renewable energy industry do their homework, have sound business plans, business experience, and are sufficiently capitalized.”

Jenkins says his office is trying to identify Wisconsin companies that are producing solar energy products. One manufacturer, Cardinal Glass Co., is spending $120 million on a new plant to manufacture thin-film photovoltaics in Mazomanie.