Solar Cells Info

Ryan Jeltema, Assistant News Editor
Greenville, MI, Dec 30, 2007
Source: The Daily News of Greenville
http://www.thedailynews.cc/Main.asp?SectionID=2&ArticleID=17864

This year was up and down for Greenville’s newest major industry, United Solar Ovonic.  The Auburn Hills-based solar panel manufacturer opened the first of its two Greenville plants in the fall while recording a significant sales increase. United Solar Ovonic’s parent company, Energy Conversion Devices (ECD) of Rochester Hills, still fell well short of profitability, however, and two accidents at the first plant caused disruptions to the surrounding area.

ECD also experienced a major shift in management with founder and inventor Stanford Ovshinsky retiring in August followed by Chairman and Chief Executive Officer Robert Stempel in November. They were replaced by former United Technologies Corp. executive Mark Morelli amid a major restructuring effort.

New plants, new jobs
With hopes for the local economy pinned on United Solar Ovonic, the company’s quiet opening of the first local plant in Greenville’s new industrial park north of VanDeinse Avenue on Nov. 1 was greeted with relief.

Meanwhile, construction is continuing on the second nearly identical plant next door with an opening slated for sometime next summer.  Each plant employs about 200 workers. Michigan Works began the hiring process for 70 workers last June.

Company officials declined to discuss progress on the plants after springtime.  Stempel told the audience during a statewide alternative energy conference in April that two more solar panel plants are “on the drawing board” for the company but would not disclose where they would be built and when they would be officially announced.

He said other cities and states continue making pitches to the company to locate plants in their areas.   “We’re down to the final selection stage,” Stempel said. “There’s a lot of pushing to put the plant here or there. People see the scope of what we’re doing and what it could bring for them and obviously they’re interested.”

He said company officials are pleased with the progress of both Greenville plants, which could bode well for locating the new facilities here. Construction on the second plant is coming along better than the first due to some lessons learned during construction.  “It’s looking pretty nice. We’re on schedule,” Stempel said. “We’ve had a very good relationship with the city and that certainly is a plus.”

Excitement short-lived

The positive feelings surrounding the opening didn’t last long.  A minor explosion in the pump room blew off an exterior wall panel on Building 1 just before 8 a.m. Nov. 21. Emergency responders determined the blast was caused by a “procedural error” when an employee improperly left a valve open. No hazardous materials were released into the air endangering the public.

“It was an overpressure explosion,” said United Solar Ovonic Senior Vice President Jay Knoll. “It was caused by a failure to close a valve during a routine system changeover.”  All 153 employees inside the building were evacuated. No injuries were reported.

Less than two weeks later, everyone within a one-mile radius of Building 1, including hundreds of people attending Greenville Community Church’s morning worship service, were evacuated Dec. 2 after a report of a gas leak at the plant.   “We were in the middle of the service,” said Joel Heron, lead pastor at the church. “I was actually preaching at the time.”

Greenville Department of Public Safety Director Michael Stuck said residents were able to return to their homes about an hour after being evacuated.   “Their (United Solar Ovonic’s) safety control system did exactly what it was supposed to do,” he said.  Knoll blamed the mishap on an exhaust stack, used to vent gases between Buildings 1 and 2, springing a leak.   “We’re working out the bugs of the plant,” he said.

$108 million sale

United Solar Ovonic announced one of its largest sales to date on July 24, a three-year distributor agreement to provide Advanced Green Technologies Inc. in Fort Lauderdale, Fla., with $108 million of photovoltaic solar panels.  “We are convinced that our relationship with Advanced Green Technologies will further successful installations of building integrated solar power systems and demonstrate the use of Uni-Solar products for improved energy self-reliance,” said United Solar Ovonic President and Chief Operating Officer Subhendu Guha.

The company also gave a sneak peek into its new residential solar system on a Habitat for Humanity house in Traverse City during the National Governors’ Association meetings in July. Governors of several states participated in building a Habitat home powered by Uni-Solar panels.

“United Solar Ovonic’s contribution to our project aids us in our mission to build high quality, energy-efficient homes at the lowest possible cost and we are grateful,” said Ken Bensen, Michigan’s Habitat for Humanity president. “We look forward to seeing Uni-Solar solutions on Habitat homes throughout the world.”  Guha said the system will be released to the public soon.

Entry into China

United Solar Ovonic also expanded overseas in 2007, entering the Chinese marketplace with a joint venture with Tianjin Jinneng Investment Co. (TJIC) of Tianjin, China, to open a photovoltaic solar panel manufacturing facility in the city of 4.5 million people.  The plant will have a capacity of manufacturing enough solar panels annually to generate 30 megawatts of electricity without affecting the company’s plans in Greenville.

Guha said the company still plans to produce mile-long rolls of solar panels, cut them into nine- by 14-inch sections and implant electrodes in Greenville. The parts then will be shipped to the Chinese plant or a similar plant in Tijuana, Mexico, to be assembled into strips of solar roof laminates or other products and covered with a protective plastic coating.

He said the China and Mexico operations were on the drawing board well before United Solar Ovonic announced plans to locate in Greenville.  “The Chinese market is going to expand rapidly and we have to be there,” Guha said.  Under Chinese trade laws “we cannot sell products in China unless we have a manufacturing presence,” he said.

Fiscal challenges continue

Still, despite all United Solar Ovonic’s growth in production and sales, the company’s profits have not been able to keep pace.  United Solar Ovonic posted a $2 million profit for the fiscal year that ended June 30, down from $8.2 million a yea earlier.

However, sales grew 11 percent during that same span to $91.5 million due to robust European sales and ramping up production capacity. With the addition of a second plant in Auburn Hills, solar panel manufacturing capacity increased from 28 megawatts to 58 megawatts annually. That is expected to triple during the current fiscal year with the addition of both Greenville plants.

“Going forward, improvements in the energy conversion efficiency of our products and our cost-reduction initiatives will drive gross margin improvement,” said James Metzger, ECD’s executive vice president and chief operating officer.

He said a $19 million grant from the U.S. Department of Energy’s Solar America Initiative will help accelerate improvements in products during the next fiscal year and beyond.  United Solar Ovonic projects a sales increase to from $205 million to $225 million over the current fiscal year, more than double that of the previous year.

The first fiscal quarter was a good start.  United Solar Ovonic reported $41.9 million in revenue during the three-month period, which ended Sept. 30. That represents a 76 percent increase over last year’s first quarter.  Morelli noted that supply agreements and product commitments for the second quarter exceed United Solar Ovonic’s current capacity.

“Our laminates continue to gain momentum in the marketplace, as demonstrated by our growing pipeline of business,” he said. “I am encouraged by our opportunities and our progress.”