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Posted on Mon, Nov 23, 2009 : 7:30 a.m.

Experts: Michigan's clean energy industry would benefit from feed-in tariffs

By Dan Meisler

Two tools used in other states and nations could give a significant boost to the clean energy technology industry in Michigan and the United States, a state official said Friday.

Stanley "Skip" Pruss, director and chief energy officer at the Michigan Department of Labor and Economic Growth, said a soon-to-be released federal report will recommend feed-in tariffs as a way to complement renewable portfolio standards legislation that has been implemented in several states.

Feed-in tariffs reward producers of alternative energy with higher payment rates, and renewable portfolio standards, or RPS, require utilities to use renewable energy sources.

Pruss said Germany has become a leader in alternative energy largely due to feed-in tariffs, and that Michigan can do the same.

He spoke at the Cleantech Conference 2009 at the University of Michigan on Friday as part of a panel addressing development of Michigan's cleantech industry.

Pruss said converting an industrial base to alternative energy production is possible, using Germany as an example: "They did it," he said.

"This is possible with the correct policy," Pruss said. "At the end of 2008, (Germany had) 281,000 employed in alternative energy. Next year, they'll have more than in their auto industry."

He reminded the audience that German automakers include Volkswagen, BMW, Mercedes-Benz, Porsche and Audi.

Several states are considering feed-in tariffs, which give homeowners and businesses incentives to install and connect alternative energy systems into the existing grid.

Adapting Michigan's auto manufacturing and supply chain facilities to alternative energy has been the goal of NextEnergy since it was created by former Gov. John Engler, and Pedro Guillen, director of industry services for the nonprofit, outlined its achievements this year. They include $20 million in research and development programs in partnership with supply chain companies, with $200 million in the pipeline and $290 million in new business for supply chain firms.

Panelist Jerry Mader, who researches energy and transportation at the U-M College of Engineering, said the university has emphasized commercialization of research more since the hiring of Stephen Forrest as its vice president for research, and touted the recent milestone of $1 billion in research funding at the university.

But he added that turning that money into gainful employment - after most of the students in the audience indicated by a show of hands that they plan to leave the state after graduating - is another story.

"We need to translate more of that billion dollars into jobs," he said. "We're doing a lot more, but this is the dawn of what we need to do," he said.

Loch McCabe, president of clean energy consultants Shepard Advisors, said Michigan can become a leader in alternative energy by taking advantage of the state's existing research institutions, research and development "innovation ethic," and its "export oriented" supplier line.

"If we play our cards right, we can leapfrog a lot of other states and countries in the years to come," he said.

And Mary Lou Benecke, vice president of government affairs for Dow Corning Corp., said Michigan's economic troubles should be sufficient incentive to enact policies that will promote the cleantech industry.

"If this recession isn't enough to give us a kick where we need it ... then we don't deserve it," she said. "We need urgency."

Freelance reporter Dan Meisler can be reached at