Commentary: In Michigan, energy manufacturing industry plays critical role

Michigan’s strong automotive
manufacturing base will play a central role in the state’s recovery. But a
less-appreciated core part of Michigan’s manufacturing sector is in the
advanced energy industry. These companies provide domestic manufacturing jobs
at a time when employment is particularly sorely needed and are involved in
making a wide range of things including components of renewable energy projects
like wind turbine towers, batteries for energy storage, inputs used to make
solar panels, electric vehicle charging infrastructure and much more.

The advanced energy
manufacturing industry is an asset we can tap into at times like these, but it
is important to realize that this industry is not here by accident. Building it
up required many deliberate policy choices that were supported by the Michigan
Energy Innovation Business Council (Michigan EIBC) and others over a number of
years. In order to figure out how to move forward, it is useful to look back at
what policies have facilitated the growth of the manufacturing industry in
Michigan.

Everyone knows about
Michigan’s prominence in automotive manufacturing, but the role of advanced
energy as one of the most vibrant parts of the state’s economy has been a
less-noticed story. This year’s Clean Jobs America report ranked Michigan fifth
among the 50 states as of the end of 2019 in terms of the share of the
workforce in ​“clean energy” jobs, which includes sectors like solar, wind and
energy efficiency. Michigan was number one in the manufacturing-heavy electric
vehicle (EV) sector, at over 24,000 jobs.

Like all industries,
employment in these sectors is currently taking a huge hit with the COVID-19
crisis. The Clean Jobs America report found that just as Michigan is
fifth-highest in clean energy jobs, it also had the fifth-highest job losses
compared to other states in March.

But the growth in Michigan’s
base of talent and infrastructure created by these companies will remain and be
critical to helping the state bounce back.

For example, in March,
Michigan EIBC member Hemlock Semiconductor, based out of Saginaw
County, donated 15,000 masks, goggles, latex gloves, face shields and
other pieces of personal protective equipment (PPE) to central Michigan health
system Covenant HealthCare to help with the heavy burden healthcare providers
are forced to carry through this pandemic. Hemlock is the country’s largest
producer of polycrystalline silicon, used to make solar panel cells and various
electronic devices.

As cited in Michigan EIBC’s report on ​“Economic Impact of New Energy Manufacturing in Michigan,” Hemlock has
been one of the biggest contributors to Michigan’s growing advanced energy
manufacturing sector. This report, one of Michigan EIBC’s first as an
organization in 2011, caught the trend early and showed that energy-related
manufacturing was becoming a major component of the state’s economy.

Since then, Michigan EIBC and
the rest of the advanced energy community in Michigan have supported policies to
help foster this growing industry. One of the most important steps was the
creation of a renewable portfolio standard (RPS) for Michigan, which requires a
certain amount of the state’s energy to come from wind, solar, biomass and
other renewable energy sources.

The RPS attracted companies
working in renewable energy to Michigan to meet this new demand. In 2016,
Michigan EIBC participated in the successful effort to expand the requirements
of the RPS, which includes a provision giving bonus renewable energy credits for electricity
generated from Michigan-made equipment.

Michigan is host to many manufacturing
companies serving the renewable power supply chain. In addition to Hemlock,
there is Ventower Industries in Monroe, which makes wind turbine towers. In
Clare, Advanced Battery Concepts designs and manufacturers batteries that are
often used to store energy generated by renewable sources so it can be deployed
later.

Another indicator of the growing
advanced energy industry in Michigan is the number of companies serving the
electric vehicle (EV) and ​“smart” and autonomous mobility sectors. Beyond the
Big 3’s increasing focus on EVs, there is a web of other players serving the
market: HME Ahrens-Fox makes cabs and chassis used in all-electric fire trucks.
Volta Power Systems designs lithium-ion battery systems used in a variety of
transportation applications. Phoenix Contact USA, located in Ann Arbor, makes
devices used to help EVs charge faster.

Once again, the industry
cannot be separated from the policy that supported it. For the last three
years, Michigan EIBC has been holding a series of convenings that bring
together representatives of automotive companies, the advanced energy community
and policymakers to talk about strategies to make EVs flourish. Michigan EIBC
and other groups have supported the state’s investor-owned utilities in their
efforts to create EV pilot programs that include rebates for charging
infrastructure and special rates to charge EVs when they draw electricity from
the grid.

Most recently, Michigan
EIBC’s research organization, the Institute for Energy Innovation, published a report laying out ways
to enhance the state’s procurement of EVs.

Recovery from the COVID-19
pandemic and accompanying economic crisis will be a difficult process. All
businesses in Michigan, no matter the industry, have felt the effects in one
way or another. As the state recovers and regrows, it will be essential to
continue and expand the policies that have made Michigan a place where
innovation and manufacturing in advanced energy invigorates the economy.