Building a Solar Market in Milwaukee

Amy HeartBy AMY HEART

Known for generations as “Beer Town,” Milwaukee was a brewing and manufacturing powerhouse from the mid-1800s, when large numbers of Germans and other immigrants brought their innovation, mechanical skills and dreams of a new homeland. It was to these same qualities that we returned when we were named a Solar America City three years ago, knowing that they held the key to a new dream: that of a robust solar market, creating good-paying, sustainable jobs with a clean, future-looking energy industry.

solar thermal sunset

A December report by Navigant Consulting found that for Milwaukee-area manufacturers, the solar hot water industry offers an opportunity to build on manufacturing expertise while tapping into a growing market. Shown here, the solar water system-testing facility of A.O. Smith, headquartered in Milwaukee. Photo: A.O. Smith Corp.

The U.S. Department of Energy named the city of Milwaukee a Solar America City in 2008. Along with 25 other Solar America Communities, Milwaukee set out to increase interest and investment in solar energy. The city’s solar program, Milwaukee Shines, is led and administered by its Office of Environmental Sustainability.

From the start, Mayor Tom Barrett supported the program and initiatives. His vision for sustainability creates an atmosphere where programs like this one can be created and thrive. From the start, we approached the opportunity not with the goal of investing in one large solar project, but instead, to establish the infrastructure needed for a permanent solar economy.

Essential to this effort, we created a public-private partnership of public entities, utility and state energy program representatives, nonprofits, training and education organizations, installers and private companies. This advisory committee helped us to think strategically about how to expand solar in Milwaukee as efficiently and effectively as possible.

Each Solar America City developed goals that would best move the solar market. In Milwaukee, we identified major informational and economic barriers. We tackled these issues in a variety of ways, and since 2008, Milwaukee Shines has witnessed some immediate successes and created long-term strategies for a sustainable solar market and industry.

 

Solar Installations

Number of Solar Hot Water (SHW) and Photovoltaic (PV) Installations in Milwaukee on the Rise

From 2008 to 2010, solar installations in the city, though still modest, more than tripled, with solar capacity increasing nearly fivefold. We learned valuable lessons along the way, ones that I hope will be of help to those working to expand their own solar markets.

 

Creating a Workforce and Demand

To address the informational barrier, Milwaukee Shines focused on demonstrating that solar is a viable energy choice for consumers and industry and a viable career for professionals and industry. The most important piece was creating a solar workforce.

Solar Installers Assessors in MilwaukiiMilwaukee Shines partnered with the Midwest renewable Energy Association (MREA), an American Solar Energy Society chapter, to provide accredited programs that train students for certification with the north American Board of Certified Energy Practitioners. We were able to quickly ramp up a training program offering intro-level through hands-on training courses, including MREA-accredited trainings, programs at local technical schools, IBEW apprenticeship trainings and networking events for training grads to meet local business principals. As a result, we tripled the number of solar installers and doubled the number of solar site assessors in the immediate Milwaukee area in less than two years (see charts). Importantly, we know these training programs will be available for decades to come.

With the training in place to build a workforce, our next step was public education. We maximized our efforts with a Solar Coach who attended events and met with organizations to spur interest in solar, and then we provided opportunities for consumers to learn more through free one- and three-hour solar seminars that we continue to hold monthly.

Lesson Learned: Be able to connect the dots. If your community is launching any sort of solar initiative, whether an installation on a public facility or a financing program, community members will want to know more about solar and how it might work for them. Make sure you have a reputable place to send them.

Helping Consumers Finance Solar

The cost of solar is still the major barrier for home and business owners. Early on in the Milwaukee Shines program, we worked to develop the PACE (Property Assessed Clean Energy) financing model that had proved successful in other parts of the country. As we prepared to launch our PACE solar program in early 2010, the Federal national Mortgage Association and the Federal Home Loan Mortgage Corp. (aka Fannie Mae and Freddie Mac) raised concerns. Instead of waiting for the federal government or the courts to settle the issue, we started to look at other financing options.

We avoided developing a government-led program that could be cumbersome to the public, short-lived or dependent on grant funds; instead we created a partnership with a private financial institution.

In July we launched the Milwaukee Shines Solar Financing Program, a low-interest loan program that serves two goals:

1.) providing financing solutions for homeowners, and

2) encouraging banks to offer competitive solar financing options.

p39SolarFinancingMilwaukee partnered with Summit Credit Union on this project, the first such solar loan program in the country. Using funds from a private donation, the city provided $100,000 as a loan loss reserve to Summit. In turn, Summit provided a 20:1 leverage and is offering up to $2 million in low-interest solar loans for Milwaukee homeowners.

We’re leaving financing to the experts in the private sector, but we’re helping to lower the interest rates. And it seems to be working; six homeowners signed up during the first week, and we see more inquiries daily. Quarterly targets allow us to tweak the program as needed.

Lesson Learned: This program is easily replicable if you can find an interested financial institution and just a bit of funding. We hope that this program creates momentum in the financial industry as well as throughout Wisconsin. Currently in Wisconsin, third-party ownership of systems is not allowed, and leasing is not covered in our state incentive program. Customers must finance the entire cost of the system upfront, so being able to offer affordable financing options gives us one more tool to support solar adoption.

Establishing a Local Supply Chain

Milwaukee looked for opportunities to address other economic barriers in a way that would improve the long-term stability of our regional solar market as well as our overall economy. Milwaukee’s strength lies in making things well, with a skilled workforce. We are known for our precision manufacturing. Based on these strengths, we created the Milwaukee Metro Solar Hot Water Business Council (SHWBC) as a public-private partnership and an offshoot of Milwaukee Shines.

Milwaukee Shines

With the training in place to build a workforce, Milwaukee Shines focused on public education. It sent a Solar Coach to local events and organizations, and then provided opportunities for consumers to learn more through free solar seminars. Photo: Caleffi Solar

The SHWBC’s mission is to attract, support and retain solar water manufacturers and supply chain distributors and to facilitate collaboration among stakeholders in Milwaukee’s seven-county region.

The Council gathers industry stakeholders, economic development specialists and higher education partners with the goal of providing business mentors and innovative research and design ideas to grow the market. Milwaukee is fortunate to have great international businesses, including A.O. Smith, Caleffi Solar and Johnson Controls, that are willing to support other companies in the solar supply chain.

The SHWBC was inspired by a 2009 study, “Solar Products Manufacturing in Milwaukee,” by consultants CH2M Hill. The study suggested that Milwaukee is well-suited to become a manufacturing cluster for solar hot water (SHW) components because of its proximity to an emerging local SHW market, access to a booming national and global market, manufacturing expertise, state incentives for manufacturing renewable energy components and available land for business expansion or relocation.

solar Homeowners

In July, the city launched the Milwaukee Shines Solar Financing Program. The city provided $100,000 in donated funds as a loan loss reserve to Summit Credit Union, which in turn is offering $2 million in low-interest loans for Milwaukee homeowners. Photo: Housing Authority of City of Milwaukee

To delve deeper into potential opportunities, we initiated an analysis of the national and world SHW market and Milwaukee’s potential role in that supply chain. The report, “Solar Water Heating Supply Chain Market Analysis,” was completed last December by Navigant Consulting. It concluded that for Milwaukee-area manufacturers, the SHW industry offers an opportunity to build on manufacturing expertise while tapping into a growing market. Specifically, the report indicated Milwaukee’s capabilities in manufacturing, assembly and distribution of high-quality, high-value components translate well to pump stations, collector-mounting and-racking systems, solar thermal collector frames, expansion tanks, heat exchangers and drainback tank components.

In addition to supporting the city’s existing manufacturers in expanding into the new opportunities mentioned above, we also are working to bring new companies to Milwaukee. With the support of our economic development representatives, government administration, industry stakeholders and research and educational facilities, we’re able to create relationships that are necessary in the small but growing solar thermal industry.

As part of its commitment to strengthening the industry as a whole, the SHWBC will host SOLAR THERMAL ’11 in Milwaukee Dec. 1–2. Organized by the MREA, it is the nation’s only conference dedicated to the solar thermal industry. For details visit solarthermalconference.org.

Lesson Learned: Build on your strengths. We evaluated our strengths as a community and within the industry and expanded on them. Find the right fit for your economy, whether in software development, research and development, the legal sector or finance. Most importantly, take the time to create relationships that are trustworthy and will work in the long run for your city’s economy and the industry.

Seizing the Opportunities

MREA

MREA conducts a hands-on training installation for Milwaukee Habitat for Humanity. Photo: Matthew Giovanelli of Werner Electric Supply

We approached the Solar America Communities program as chance to jumpstart our investment in solar and create a sustainable solar market. The support from our top administration was vital in getting the necessary partners involved. It takes more than one individual to create a sustainable solar program and market in a community, regardless of its size. Our advisory team and Milwaukee Metro Solar Hot Water Business Council have been essential. I’d urge other solar market builders to invite interested city and county staff from various departments. Bring in private industry representatives ranging from installers and manufacturers to financial and legal experts, and be sure to involve utility and state energy staff. Nonprofit and community advocates are another source of valuable insights and passion.

As the Solar America Communities program draws to a close, we can point to a number of successes. But most importantly, we have created a framework to tackle the issues that lie ahead. Milwaukee will create an easier-to-navigate solar permitting process with engaged city staff, we will develop more creative financing solutions for consumers, we will tackle the issues surrounding energy and urban agriculture opportunities, and we will increase renewable energy use in all sectors. We have a lot of work to do, but we’ve paved the path for long-term success. Someday soon we’d like to be able to say that just as our beer has done for more than a century, “It’s solar that made Milwaukee famous.”

 

Amy Heart is the city of Milwaukee’s solar program manager and leads Milwaukee Shines. Before joining the city, Heart spent nearly five years with the Mid- west Renewable Energy Association. She served on the Stevens Point, Wis., city council, where she co-chaired the city’s development of its eco-municipality plan. A graduate of the University of Wisconsin-Stevens Point, Heart is currently a student at Marquette Law School.

Many thanks to all our Milwaukee Shines partners:
City of Milwaukee, Boys & Girls Clubs of Greater Milwaukee, Caleffi Solar, Focus on Energy, Helios Solar Works, Hot Water Products, Housing Authority of the City of Milwaukee, Johnson Controls, Layton Boulevard West Neighbors, Midwest Renewable Energy Association, Milwaukee Area Technical College, Milwaukee Area Workforce Investment Board, Milwaukee Community Service Corps, Milwaukee County, Milwaukee Public Schools, Milwaukee School of Engineering, Milwaukee Workforce Investment Board, Summit Credit Union, University of Wisconsin-Milwaukee, Walnut Way Conservation Corp., We Energies, Wisconsin Energy Conservation Corp., Wisconsin Energy Research Consortium, Wisconsin Green Building Alliance, Wisconsin State Energy Office.

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