PowerFilm, Inc. flexible solar collection product

[COMMENTARY] After years of economic hardship and struggle to right the state’s economy as the automobile industry began to sink, the people and government of Michigan have begun to look towards diversification to stay afloat. There is strong interest in alternative energy and high-tech industries as new growth opportunities upon which to build a future.

Yet Michigan is still not thinking far enough ahead. The state is not fully equipped to encourage such industry, as many are aware. If young people are to obtain the jobs of the future, education requires greater and sustained emphasis. Our leaders endorse and encourage solutions which they cannot understand or explain. Indeed, they don’t even know to ask salient questions that could lead to bettter solutions. In his best-selling book “Future Shock,” Alvin Toffler referred to a state in which humans struggle mightily to cope with too much change too quickly. Perhaps “future shock” describes Michigan’s current befuddled and floundering condition.

One example of “future shock” involves the solar-panel industry, exemplified by a mid-Michigan business, Hemlock Semiconductor (HSC). HSC is a subsidiary of Dow Corning and specializes in the manufacture of purified silicon. This type of silicon has been a key component in solar panels, forming the collection substrate. Many citizens and government officials applauded HSC’s recently announced $1 billion expansion of its facility in the town of Hemlock.

Yet the implications of this expansion have escaped scrutiny. There are several methods of manufacturing the large poly-crystalline chunks of silicon that are shaved into thin layers for current solar panels. They require considerable energy as they melt silica — what most of us consider sand or rock — into a clear fluid that later solidifies. Imagine how hot an oven must be to melt beach sand, and what the power bill would be for such an oven to run 7 days a week, 24 hours a day, 365 days a year and you will begin to grasp the challenge that faces HSC and Michigan.

HSC is both blessed and cursed. The volatile cost of petroleum increases demand for alternative energy like solar power, making HSC very popular with solar-panel manufacturers. And yet HSC, already challenged by supply problems with the silicon dioxide necessary to make poly-crystalline silicon, cannot be assured of enough energy at a reasonable price to remain popular. There are other manufacturers of poly-crystalline silicon that may be located near cheaper sources of power, or closer to the solar-panel manufacturers, reducing their shipping costs.

If it is to remain competitive, HSC must have more and cheaper power. A source familiar with the company explains that HSC must have the coal-fired plant that has been proposed for nearby Midland. Without the cheap energy that a coal-fired plant produces, this source says that HSC will have no choice but to go someplace else where energy would be cheap enough to assure its competitive position in the poly-crystalline silicon market.

And yet, there is no coal-fired plant in Midland. There is a co-generation plant built upon the bones of a never-realized nuclear plant; the co-generation plant now uses natural gas. One might ask why the co-generation plant isn’t viewed as the source of HSC’s energy needs now and into the future. As an executive with a Michigan-based natural gas firm explained, natural gas is more expensive than coal for electricity production at this time, and is likely to remain more expensive for the foreseeable future.

Coal, by contrast, is cheap. Only the common perception of coal’s “dirtiness” and regulatory hurdles make coal less acceptable than natural gas. Fear of dirty coal already gives Michiganders of Midland pause about a coal-fired power plant. Will current scrubber technology make it as clean or cleaner than natural gas for a community already troubled by pollutants generated by chemical manufacturing? Will they have to plan for potential problems like a coal ash spill, similar to the recent spill in eastern Tennessee?

Another hurdle with coal is that it produces carbon dioxide (CO2) as it is burned during electricity generation. The amount of CO2 produced by burning coal to create poly-crystalline silicon could well negate the climate change value of the solar panel. We might burn less oil to obtain solar energy, but it comes at the same cost to our environment in the creation of greenhouse gases.

Still another problem could make all of this moot. Research and development for other kinds of solar collection technology are improving rapidly making it possible that cheaper solar panels that may not require poly-crystalline silicon wafers. One such technology now reaching production consists of a fabric or sheet-like panel that is thin and lightweight enough to be used on roofs. While not yet as commercially viable as traditional solar panel technology, it is far cheaper when compared square inch to square inch, and more easily installed in a number of applications.

At least a half dozen companies stand ready to compete with their own solar film products — PowerFilm, located in Iowa, for one, or United Solar Ovonics, located in Auburn Hills. These products will require far less silicon and less energy to produce, or in some cases, replace silicon-based collection technology with cheaper plastics. If this is the current state of the industry, where will the technology be after the years that it will take to propose, approve and build a coal-fired electric plant in Midland?

In short, the idea of HSC remaining in mid-Michigan may be dead in the water before we even begin debate about cheap electricity. The product technology they are manufacturing could be obsolete by the time the power plant is done. Even HSC understands this, having hedged its bets by investing $1.2 billion in expansion of a Tennessee plant, while only investing $1 billion in its mid-Michigan plant expansion.

No one in Michigan government asks the kind of questions that should be debated before we talk about another coal-fired plant, or providing additional incentives to HSC in pursuit of jobs. The questions are, Is HSC’s business model going to be viable in two, five or 12 years? Are there other, better technologies that we should be courting instead, or offering better incentives to stay in Michigan?

Right now, few in Michigan seem capable of thinking that far ahead. Solar energy technology seems to inhibit the capacity for forward-thinking.

Hello, future shock; good-bye, opportunities.