Silicon Energy gone, new company moves in

Another vaunted Iron Range economic development project has quietly fizzled out. The Duluth News Tribune reported last week that Silicon Energy, a producer of solar panels, finally pulled out of its taxpayer-subsidized plant in Mt. Iron.

This doesn’t come as a big surprise. Iron Range leaders have long murmured about the starts and stops of the company. Long idle periods seemed evident by the absence of cars in the parking lot.

The best way to describe the woes of Silicon Energy is that the company sought to enter the fast-growing residential solar panel market with a more durable, but more expensive product. At the same time, prices of solar panels made in China plummeted as the production scale ramped up. Even if the cheaper panels weren’t as durable, they were cheap enough that people happily took the chance. When Silicon responded by trying to make its own lower cost panels, they found themselves a day late and a dollar short.

The company was heavily subsidized and enjoyed rather significant help from special legislation that gave the company’s products special treatment. The city owns the building, built with $3.6 million in IRRRB funds. The two frontage roads abutting the factory were named for legislative sponsors Sen. David Tomassoni and former Rep. Tom Rukavina, respectively. Mt. Iron city lobbyist and influential Range political player Gary Cerkvenik worked for both the city and the company in coordinating these details.

The whole thing prompted one of my most pointed criticisms of the Iron Range political structure in 2015, an essay I titled “The lobbying cycle that limits Iron Range progress.”

For much of the company’s run, not much more than a dozen people were employed. At the time of its demise at the end of April, just four people were left.

You could declare this yet another total failure of Iron Range economic development planning, but the news isn’t all bad. The DNT reports that another company moved into the plant to produce its own solar panels.

Heliene, Inc., a Canadian company based in Sault Ste. Marie, Ontario, moved into the space last month. The company currently employs eight people. And yes, they too have retained the services of Cerkvenik, who says Heliene is already producing more panels than Silicon ever did.

So it bears mentioning that sometimes failures can still be salvaged. Nevertheless, risk management continues to be a burden borne by the people of the Iron Range. One hopes that profits will be shared as generously.

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