Windsor’s Chris Vander Doelen: Green energy incentives

Windsor Star columnist Chris Vander Doelen

Not everyone is as delighted as Mayor Eddie Francis by the string of solar and wind energy projects being touted as the economic salvation of the Windsor region.

Some skeptics think the renewable energy boom gathering steam in Ontario is nothing more than a flash in the pan, ignited by government incentives.

Once the government money runs out — and it will, because subsidies are always unsustainable — watch the province’s fledgling “green” industry go poof, the critics say.

The media should be pointing out such pitfalls, one local business guy complained to me this week.

“How about the other side?” he challenged via email after reading my approving Tuesday column about the economic potential of having a cluster of local renewable energy companies set up here.

“The truth … these companies are setting up shop because the government has signed 20 year lucrative contracts (paying) 80 cents per kilowatt hour when the consumer is paying around six cents,” he wrote.

Under Premier Dalton McGuinty’s “green” energy plan, he complains, consumers will pay subsidies of up to 74 cents per kilowatt hour for renewable energy that is still only worth six cents on the market.

“This green energy is not as good as it is being presented.”

On Tuesday I put some of those worries to the two principals of Solar Source Corporation, the Canadian/Indian partnership that intends to be assembling solar panels in Windsor by December.

Solar Source hopes to have 150 employees in place by the end of the year so it can produce crystalline silicone photovoltaic panels in a “clean room” environment, in a new building built for them by Windsor Airport.

Solar Source wants to produce 30 megawatts per year in the first of four planned phases, in the form of 300-watt panels that will measure one meter by two metres each.

Solar Source estimates it will be able to pump out 330 to 350 of these big panels per day in its first year of operation, or 300,000 per year. Additional phases of 30 megawatts of annual production will be added as market conditions warrant.

“There’s big demand,” says Ross Beatty, president of Solar Source. On Jan. 1, 2011, a new Canadian-content rule comes into effect for subsidized solar projects in Ontario, “and we want to be the first company able to produce made-in-Ontario panels.”

There is no doubt their plant will go like gangbusters once open. The Can-Con rule will force developers of solar farms to find local sources for their panels rather than importing finished panels from Korea and Germany.

So what happens when the incentives end? Beatty is unfazed by that question. “I don’t think anything in government is permanent,” he said with a reassuringly cynical grin.

“But we don’t believe (the boom) will end if Ontario turns off the tap. We’re still at the beginning — the industry is in its infancy.”

Prasanth Sakhamuri, managing director of HHV of India, Beatty’s joint venture partner in Solar Source, agreed. “These types of technology need to be supported by government at first. But once it gets rolling …”

Ontario happens to be the first jurisdiction in North America offering a feed-in tariff or subsidy to new renewable energy sources. Other provinces and states are bound to follow suit with their own FITs, further driving demand. But it won’t end there, Solar Source says.

Germany’s solar panel industry continues to be robust despite the subsidies coming to an end in that country, Sakhamuri says. Besides, he said, “we make the best quality panel today in the world.”

That’s likely not a boast. Sakhamuri is the second generation of a family which helped transform their home town of Bangalore, India, into that country’s silicon valley.

In the 1960s, electronic vacuum tube equipment produced by Sakhamuri’s father for the Indian nuclear industry helped propel Bangalore into India’s leading technological city. Today, HHV (for Hind High Vacuum) employs 750 people.

Solar Source will import panel-finishing equipment from HHV India which will be used to apply electrical overlays and final coatings on glass panels also imported to Windsor, which will then be installed in metal frames for final use.

And Windsor, being nearly in the geographical centre of North America, is the perfect place to put a stake in the ground to quickly mark their territory, Beatty says. “The largest market for energy in the world is right here, right below us.”

That sounds to me like a business plan built on exports, not subsidies. Here’s to their great success.

‘Relentless’ lobbying landed solar panel firm

By Doug Schmidt, The Windsor Star May 11, 2010 10:57 PM

WINDSOR, Ont. — Midnight phone calls and a promise to “do what it takes” helped Windsor land a cutting-edge solar panel firm and the possibility of 500 jobs within three years.

Photograph by: Tyler Brownbridge, The Windsor Star

Prasanth Sakhamuri, managing director of HHV, left, and Ross Beatty, president of Solar Source Corporation take part in a press conference at the Windsor Airport on Tuesday, May 11, 2010. A new solar paneling manufacturer will be locating in Windsor.

“Most of the times you lose — but sometimes you’re going to get lucky,” said Patrick Persichilli, executive vice-president of the WindsorEssex Economic Development Corporation.

“We were relentless,” Persichilli said Tuesday of the 18-month lobbying effort to bring Ontario’s first solar panel manufacturing facility to Windsor. Solar Source Ontario is a joint venture of a subsidiary of Canadian merchant bank Solar Bancorp Inc. and India-based multinational HHV.

While there were other places with the “capability and capacity” to host a high-tech manufacturing facility, Solar Source president Ross Beatty said Windsor impressed with its “political will” and its persistence.

“Windsor is a wonderful place for us to put our (North American) beachhead,” he said. “It was very attractive that the mayor, the city wanted to turn Windsor into a (renewable energy) hub,” he added.

Francis said Windsor’s message to potential investors has been: “You tell us what you need and we will make it happen.”

As part of the deal to attract Solar Source, Windsor city council, meeting behind closed doors Monday, agreed to spend up to an estimated $4 million to build a 45,000-square-foot facility that will then be leased back to the company. The manufacturing plant will be the first occupant of a new business park being developed on Windsor Airport lands located between the Concession 8 and 9.

In return, Solar Source promises to invest “well in excess of $40 million” in its Windsor launch, with the first solar panels to be coming off the line by the end of the year at an operation expected to employ up to 200 people by next year, according to Beatty. Depending on the renewable energy marketplace, considered on an upswing, he said a Windsor workforce of up to 500 is possible within three years.

“This is going to be a hub,” said Beatty, who predicts other renewable energy companies will now focus on Windsor.

“An industry is being born” in Windsor, said Francis. He promised “other announcements to follow” Solar Source’s decision to set up in Windsor. He described the joint venture’s choice of Windsor as its first North American presence as “very significant, historical.”

The development corporation’s Persichilli said turning the local area into a renewable energy hub is not about reinventing the community but about leveraging two of the area’s traditional strengths — “making things and moving things.”

Beatty said Windsor’s location, with lots of sun — despite the pouring rain during Tuesday’s announcement at Windsor International Airport — and having a skilled workforce at the doorstep of the United States were all factors in deciding to locate here.

One of the people thanked on Tuesday was Rakesh Naidu, the local development corporation’s “director of business attraction” credited with selling the Solar Bancorp Group of Companies on Windsor’s dream of turning itself into Ontario’s renewable energy centre. Beatty, who joked about getting calls at all hours from Naidu, said he was introduced to him 18 months ago when his group went to Queen’s Park, enquiring about startup locations, and Windsor was mentioned as a possibility.

Persichilli said Windsor’s willingness to make the initial investment of a factory location was another key element in Solar Bancorp’s decision.

Francis said options are still being explored on how to fund the promised building, including the municipally owned airport either borrowing money on the market or council “assisting.” He said the lease rate charged to the new company will be “very competitive,” with property taxes on the municipally owned land “part of the lease.”

Beatty, who also heads the umbrella Solar Bancorp Group of Companies, said the focus will be on hiring “local talent” and that his company is already looking at a research and development partnership with the University of Windsor.

HHV managing director Prasanth Sakhamuri, who flew in from corporate headquarters in Bangalore, India, for the announcement, said about 30 per cent of the jobs will be for assemblers, while engineers, technicians, administration and marketing staff will be among the other employees sought. He said salaries and wages will be “competitive.”

Asked when the hiring process starts, Beatty answered by referring queries to the company’s website at www.solar-source.ca.

It will be Ontario’s first solar panel manufacturing facility. Under the province’s Green Energy Act, any investor wanting to tap into Ontario’s lucrative new renewable energy feed-in-tariff program must commit to a 60-per-cent Made In Ontario content level for project services and components.

Sakhamuri said the Windsor facility will boast “world-beating” technology and its products will be targeted to domestic and export markets across North America.

“We’re really excited about being here,” said Sakhamuri.

“Today’s a sunny day,” Beatty said as the rain pelted down outside.

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