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Wind and Solar Projects Struggling, But Stimulus is Helping.

This post comes from our intern Stephanie… we’ll have her account up and running soon, but for now it’s posted here.

Photo Credit: University of Washington

The news on alternative energy sources in Minnesota recently has indicated the exciting strides Minnesota is taking in terms of solar energy and also highlighted how the alternative energy sector has not been invincible to the effects of the economic downturn.

A Minnesota state mandate requires that 25 percent of Minnesota’s energy, including fuel, comes from renewable resources by 2025. Minnesota is now the leading wind energy producing state in the nation, according to the Star Tribune. The story describes how Minnesota legislators, Minneapolis and St. Paul mayors, alternative energy advocates, and Xcel Energy officials hailing the 2009 Legislature’s enactment of a 33.4 million dollar package of financial incentives and policy changes aimed at spurring solar energy production in Minnesota.

The money the Legislature directed to solar energy is a portion of Minnesota’s allotment of federal economic stimulus money. That means that a similar amount may not be available in 2011 and beyond –and that should make 2010 a very good year to go solar.

In contrast to this story of solar energy opportunities in the future, however, comes the fact that a southwestern Minnesotan company, Suzlon Energy, declared its plans to cut its workforce in half at the company’s Pipestone, MN wind energy plant. Although Suzlon plans to lay off 160 employees by the end of September, Pipestone Mayer Laurie Ness says the silver lining is that the plant plans to stay open. This is significant given the fact that Pipestone has already seen a boat company close, costing the city more than 200 jobs.

National Wind, a Minnesota-based company, currently has six projects on the drawing board in Minnesota and seven more in nearby states.From MinnPost:

National Wind, which develops utility-scale projects (50 megawatts and over), sets up partnership LLCs with local landowners and other community leaders. Rather than stick turbines in the ground and pay farmers for the privilege (a typical lease might be for ,000 per turbine per year), National Wind establishes what looks a lot like a co-op and local farmers have an ownership stake in the business.

These projects are currently at a stand-still, waiting for the markets to loosen up. This is because, National Wind CEO Leon Steinberg explains, the cost of even a small wind project is 100 million dollars to 200 million dollars. 

Renewable energy consultant Martin Pasqualini with CP Energy Group says money is tight throughout the wind industry. He says some of the biggest financial backers of the wind energy industry were also some of the biggest firms to collapse in the credit crisis.

Because of this, wind companies have run into increasing difficulties finding the financing to put up new electricity generating turbines and many alternative energy projects have been shelved. The falling demand for wind turbines not only affects the efforts to use alternative energy sources, but also means hundreds of workers will lose their jobs.

It is an encouraging sign that the Minnesota Legislature has recognized the need to fund alternative energy projects, such as the solar energy initiative, through the economic stimulus money. Indeed, Pasqualini predicts that the wind industry could bounce back next year should federal stimulus money continue to be dedicated to alternative energy projects. The stimulus money will kick start the stalling alternative energy sector, which in turn will create more jobs and possibly allow the people who have been laid off at companies such as Suzlon to return to work.

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