15 June 2010

Toledo Reinvents Itself as a Solar Power Innovator

USA Today

This city is trying to swap its Rust Belt image for a new identity as a hub of solar-energy research and production.

The mission is being led by an unusual partnership of business, academia and government that could be a model for other aging industrial cities. "We are ready to do anything; we are ready to try anything," says University of Toledo President Lloyd Jacobs.

Like many manufacturing cities, Toledo has struggled with the loss of jobs and tax revenue, but it has taken pieces of its past as the glass capital to create a new future in solar energy.

The payoff so far: At least 6,000 people work in the area's solar industry. First Solar (FSLR), which makes solar panels, was founded here and employs more than 1,000 at its 900,000-square-foot plant here. There are more than a dozen solar-related start-up companies in the area. The University of Toledo is home to top solar researchers and has a business incubator that provides business services to solar entrepreneurs. It has graduated four solar companies and is working with six more. Owens Community College, which had 13 students in its first solar class in 2004, has trained 255 solar installers.

"In the solar world, Toledo is a hot spot," says Xunming Deng, a physics professor on leave from the University of Toledo. He's developing Xunlight, the company he founded here in 2002 to produce thin, flexible solar panels. It has about 100 employees.

"Toledo is really emerging as a hotbed of activity for the solar industry," says Monique Hanis of the Solar Energy Industries Association, a trade group based in Washington. She compares Toledo's solar commitment to that of New Mexico and California. In California, an initiative was started in 2006 to steer $3 billion in incentives to solar projects by 2016. New Mexico offers tax credits to solar generators and has made expanding clean-energy jobs and exports a priority.

Toledo's evolution as a center of the solar industry is the result of a unique, communitywide effort that includes representatives of the city, Lucas County, Rep. Marcy Kaptur, D-Ohio, economic development groups, the university and community college — with money from the state and federal governments.

The impetus for collaboration came when Toledo's per-capita income, in the nation's top 10 in the 1970s, sank to the bottom 10 by 2000, says Rick Stansley, chairman of the board of the University of Toledo's Innovation Enterprises, which helps companies turn university research into commercial products.

The officials from government, academia and business who are steering Toledo's transformation call themselves "the partners" and meet monthly.

The partners decided about two years ago that the only way to revive the area's economy as manufacturing jobs in the glass and auto parts industries disappeared was to bring its major institutions together to think boldly and share responsibility for creating jobs. Before then, Stansley says, "We didn't have a common vision. People were parochial."

In the 1990s, says Ford Weber, president of the Lucas County Improvement Corp., community leaders were focused on keeping major employers in the city. "While we were doing that, we really couldn't reinvent our economy," he says.

Stansley, one of the partners, says, "You can argue for incremental change if things are good enough. Until they get bad enough, you can't talk about transformational change."

Once things got bad enough — the unemployment rate was 3.6% in December 2000 and 12.1% in April — the effort to remake Toledo took root.

The university recruited renowned solar researchers. It tore down the traditional separation between institutions of higher education and the cities in which they're located, offering to share its expertise. "We belong to the community, and our fate is linked inextricably to the community," Jacobs says. "We're working daily to create jobs. In fact, it is our single most important motivator."

A history of manufacturing

After it was founded in 1833 on the western edge of Lake Erie, Toledo became a crossroads for railroads and a center for factories that made furniture, carriages and glass. Owens Corning, Libbey Glass and other glass companies originated here, giving Toledo its nickname: Glass City. Auto parts makers and auto assembly plants followed. As jobs in those traditional manufacturing industries receded in the 1980s, interest in solar energy was growing. Today, Toledo still has glass factories, including a giant Libbey plant on the edge of downtown, but there are plenty of unused warehouses and closed manufacturing plants.

Frank Calzonetti, the university's vice president for research and economic development, says the seeds of Toledo's solar industry germinated in the late Harold McMaster's basement laboratory.

McMaster, a physicist, founded Glasstech Solar in 1984, then Solar Cells, which explored with University of Toledo scientists ways to produce solar energy with thin, lightweight and flexible film. The raw materials used in thin-film solar products are cheaper and more versatile than those made from silicon. In 1999, McMaster's company was sold and became First Solar.

McMaster's collaboration with the university, fueled by research grants and focused on thin-film technology, was the foundation for today's team approach to the solar industry here, says Al Compaan, a recently retired chairman of the university's Department of Physics and Astronomy. Turning solar research into jobs was "in the back of people's minds for most of this process," he says.

When First Solar went public in 2006 with an initial public offering of $20 a share, Calzonetti says, it was "a defining moment. People said, 'Wow, this is big.' " (The stock closed at $107.53 a share Monday, even though it's down nearly 21% this year.) Since then, all of "the partners" have worked to put the people, programs and policies in place to make this a birthplace and destination for companies that make, design and install solar energy:

•The university has a School of Solar and Advanced Renewable Energy, a Center for Photovoltaics Innovation and Commercialization, and a team of nationally renowned researchers. This fall, it will offer the equivalent of an MBA for students in physics and engineering who want to run solar companies. Its Scott Park Campus is devoted to — and powered by — alternative energy, including the state's largest array of linked solar panels.

"We start with education, we have research, we have incubation, we have commercialization and we go all the way to economic development," says Nina McClelland, dean of the College of Arts and Sciences.

•The Toledo-Lucas County Port Authority is spending millions of dollars to double in size, improve railroad access and buy two mobile cargo cranes to make it easier for solar manufacturers to ship their products, says President Paul Toth.

•The Regional Growth Partnership has a venture fund that has helped spawn 68 companies, about a third of them in solar and other alternative-energy fields, says President Steve Weathers.

•Owens Community College tailors its solar programs to meet the specific needs of new companies and retraining workers who once worked in other industries. Students range in age from "18 to 50 and beyond," says Joe Peschel, who works with companies to devise customized training.

Dan Klear, 57, retired in 2008 from a General Motors plant after 37 years. He had always been intrigued by solar power: 26 years ago he installed a solar thermal collector in his home. He took a solar class at Owens and with two partners founded Superior Energy Solutions, which designs and installs solar, wind and other sustainable energy systems.

In the next five to 10 years, Klear predicts, solar and wind power will become "standard fare for a new home."

For some people here, advancing solar technology isn't just a job — it's a moral imperative. Rosa Zartman, 23, a 2009 University of Toledo graduate with a degree in applied physics, works in the school's solar lab. She says she's honored to be "part of the solution to reduce humanity's impact on the world."

Working hand in hand

John Witte 56, is another beneficiary of Toledo's experiment in reinvention. Advanced Distributed Generation, the solar design and installation company he founded with two partners, was shaped in the University of Toledo incubator and is still headquartered there.

Witte worked for companies in Arizona and Colorado that tested solar systems before he went back to school for an engineering degree and founded his own company. Now he can quiz scientists on campus about the technology he uses. The business school did some marketing research for him. His company installed four of the university's solar facilities. He's seeking a grant that would fund research on smart grids. He often puts students from Owens Community College to work so they can get on-the-job training.

Witte has 10 employees and hopes to add more soon. "We started as two men and a truck," he says. "We just opened an office in Michigan and are about to open one in Florida."

Deng says his company probably wouldn't exist without the collective commitment to solar energy. It's rare, he says, for a university to put so much emphasis on commercialization of its research, and unusual for one to give a faculty member a five-year leave to build his own company.

Deng is principal investigator of a university group that is using a $1.4 million Department of Energy grant to find ways to make photovoltaic energy more affordable. If that's successful, he says, Toledo could become an even more important player in solar.

The partners know their work won't ever really end. April's 12.1% unemployment rate, though better than January's 13.6%, is a sign that old-style manufacturing jobs are being lost in this city of 293,000 faster than green jobs are being created.

Patrick McLean, the city's finance director, says the city income tax that makes up about three-fourths of its general fund was $141 million last year — down from a peak of $169 million in 2007 — and is projected to drop to $138 million this year.

"Declining jobs mean declining income tax revenues, and declining revenues mean declining city services," McLean says.

That adds urgency to Toledo's bid to redefine how industries mature by combining forces to shove solar to the forefront, Stansley says. "We're taking something that has typically been evolutionary and we're trying to artificially accelerate it," he says.

If it works, he says, the creation of jobs in the solar industry will help solve short-term problems, "but the most important thing we can do is create a culture of innovation in our community."

Larry McDougle, president of Owens Community College, sees signs that both goals can be met. "Solar is putting Toledo on the map," he says. "We used to be the Glass City. We're becoming the Solar City."

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