host posted on December 13, 2009 14:01
By Amy Lane
Crain's Detroit Business
LANSING — Michigan may be the first state to use stimulus funds to help small manufacturers diversify into advanced manufacturing of renewable-energy systems and components.
Leslee Fritz, director of the Michigan Economic Recovery Office, which oversees the state's receipt and use of stimulus funds, said that Michigan officials are not aware of any other state that has yet disbursed grants for this purpose.
However, several states have inquired about Michigan's initiative, and Wisconsin is looking at a similar grant program, she said.
The $15.5 million program comes out of about $82 million that the state's energy office received under the federal stimulus package, or the American Recovery and Reinvestment Act.
In addition to Astraeus Wind Energy Inc. (See story, Page 3), two other Southeast Michigan companies received shares of the $15.5 million: Plymouth-based Loc Performance Products Inc. is receiving $1.5 million to manufacture gears and gearboxes for utility-scale wind turbines, and Rochester Hills-based Luma Resources L.L.C. has been awarded $500,000 to manufacture products for the residential photovoltaic solar market.
“The first batch of money we'll spend will be primarily for buying the solar cells that we then incorporate in our products,” said Robert Allen, president of Luma, a small contracting firm that is reinventing itself as a provider of home-use photovoltaic solar panels.
Allen said he was impressed with the efforts of the Granholm administration.
“To me, that's a story,” he said.
Fritz said all states' energy offices received increased funding through the stimulus act, and the funds could be used for a variety of purposes. Some states, for example, are looking at revolving loan funds that companies could use to install their own renewable energy devices, she said.
That said, the grant program wasn't a simple initiative to pull off. Among other things, the state needed to get specific federal approval to spend the money in the way it proposed, and once that was obtained, the individual project sites and proposals also had to be approved by the U.S. Department of Energy, Fritz said.
“The proposal to use the money in this way, because we were the first to do it like this, we really were a test case for the Department of Energy,” she said. There were “a lot of layers of approval required.”
Fritz said the governor's Washington office was very involved and the governor tracked it closely and was engaged, including discussing it with U.S. Secretary of Energy Steven Chu.
“There was a very extensive back and forth in order to get the approval to do this. We did fight very hard and the governor did work hard to push this along,” she said.
Final approvals came just days before the state's announcement of grant winners, Fritz said.
The Michigan grant program dovetails efforts by Gov. Jennifer Granholm and her administration to help auto suppliers emerge from industry restructuring and grow.
“We wanted to do the grant program and get it out the door quickly, because we knew there was tremendous demand, that this could really kick-start the development of the next-generation technology in Michigan,” Fritz said.
Companies that applied for the money “had to have a viable product ready to commercialize” and viable buyers for that product, she said. The Michigan Department of Energy, Labor & Economic Growth, which sought funding proposals, received 79 applications requesting nearly $198 million.
Fritz said legislation is pending to establish a revolving loan fund to similarly help small manufacturers diversify.
Other uses of the energy office stimulus money include reducing energy use in state buildings, aiding utility-run energy audit programs for homes and businesses, and installing anemometers on Michigan State Police communications towers to collect wind speed data and determine the potential of wind energy at a variety of areas around the state, Fritz said.
Other companies receiving grants:
• Energetx Composites L.L.C., Holland, is receiving a $3.5 million grant that will go toward manufacturing large-scale, advanced composite wind turbine blades.
• Merrill Technologies Group, Saginaw, is receiving $3 million to manufacture large-scale, advanced-composite wind turbine blades and system components.
Nearly 80 companies submitted applications requesting nearly $198 million, the state said.
Amy Lane: (517) 371-5355, alane@crain.com