Bellingham Business Journal
by
Isaac BonnellFiled on 02. Nov, 2011 in
Features
 |
| John Flanagan started Itek Energy in Bellingham this year and plans to
produce up to 120,000 solar panels a year out of his facility in
Irongate. The solar panels qualify as made in Washington, a
certification that more than doubles the incentive available to
customers. Isaac Bonnell | BBJ |
Despite Washington’s reputation for gloomy weather, the market
for solar panels is looking brighter thanks to state incentives that pay
homeowners and businesses up to $5,000 for producing solar energy.
Here in Bellingham, that incentive program has led to the launch of
Itek Energy, a solar panel manufacturer that opened earlier this year in
an 18,600-square-foot building in Irongate and is ramping up
production.
Though the incentives are paid to the energy producer, they were put
in place to help create demand for local solar panel manufacturers by
paying producers nearly four times more for solar arrays made here in
Washington.
Rather than the base rate of 15 cents per kilowatt-hour of energy
produced, the state will pay 54 cents per kilowatt-hour for energy
produced with solar panels and an inverter that are made in Washington.
“The incentive package is one of the best in the whole country,” said John Flanagan, president of Itek Energy.
The incentive program for renewable energy production was passed by
the Legislature in 2005 and also includes wind power and anaerobic
digesters. Itek is one of just two companies in the state — the other is
Silicon Energy in Arlington — making solar panels and inverters that
qualify as made in Washington, said Mike Gowrylow, spokesperson for the
Department of Revenue, the agency that issues the certification.
Expanding production
Getting the company up and running has been time consuming, Flanagan
said, from purchasing equipment and setting up the production line to
meeting state requirements and getting product safety certifications.
The UL rating alone took about eight months to get.
To date, Itek has produced around 100 solar panels, but Flanagan plans to ramp up production with the start of the new year.
“Every day we’re producing more and more. We should be able to make
100 a day in a couple months. With our equipment now we have the
capacity to produce 30 megawatts a year,” about 120,000 solar panels,
Flanagan said.
At full production capacity, Flanagan plans to employ 40 to 50 people working around the clock in three shifts.
Much of the production line is automated, involving machines that lay
individual solar cells in a line and solder them into a string of 10.
Six strings make up a full solar panel, which also includes layers of
glass and insulated backing that are all laminated together before being
placed into an aluminum frame.
Itek does not make any of the materials for the solar panels, but
since the company assembles them into a finished product, that qualifies
as made in Washington, Flanagan said.
Solar panels are only half of the equation though. The power that the
panels produce has to go through an inverter that switches the current
from direct current (DC) to alternating current (AC).
Also, the state
offers incentives for using inverters that are made in Washington.
Though Itek designed and developed its own solar panel, Flanagan
decided to partner with Texas-based Exeltech to make the inverters.
Starting in December, Itek will start building inverters designed by
Exeltech.
Overcoming high prices
The greatest hurdle for Itek and the whole solar industry is the high
upfront cost for customers, said Joshua Miller, project manager for the
solar installation company Western Solar. In fact, certified made in
Washington panels cost about 30 percent more than panels made by larger
companies that have economies of scale.
Despite the higher cost, Miller is seeing a jump in demand for
locally made panels because the state incentive is better and customers
can pay off the investment in about seven years, compared to 10-15 years
for out-of-state panels. Half of the solar panels he installs now
qualify as made in Washington, he said.
“So even though you’re paying more upfront, you’re payback is much
quicker,” Miller said, adding that there is also a feel-good factor to
buying panels made in Washington. “The people that tend to buy solar
panels are interested in locally produced power and having those panels
built here falls right in line with that.”
As Itek grows and realizes production efficiencies, the price of its
solar panels should come down, making it more attractive for the average
homeowner, Flanagan said. But reaching that point would be difficult
without the state incentives.
“In our business, volume is very important,” he said. “What we’re
hoping is that when those incentives diminish in 2020, the market will
have grown enough to be sustainable. If all goes well, what we’re hoping
to achieve is greater acceptance of solar.”
Al
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