MOUNTAIN IRON, Minn. - The solar panel industry has been in tumult for the past few years, and few know that better than Martin Pochtaruk.
He runs a company called Heliene, whose manufacturing operations in Canada were crushed in 2018 by U.S. tariffs on solar panel imports. Pochtaruk pivoted a big chunk of his company's production to the United States, taking over the former home of a failed Minnesota solar panel maker in Mountain Iron.
"You have to be prepared and have the agility to react to import and export policy changes," Pochtaruk said. And under President Donald Trump, trade policy changes have come quickly and dramatically for the solar industry.
Heliene, which continues operating its original plant in Sault Ste. Marie, Ontario, is a small player in the North American market. But it is Minnesota's only surviving solar panel manufacturer. And with 92 workers in Mountain Iron working three shifts, it is a welcome economic addition to the Iron Range.
U.S. demand for solar panels is strong, while supply is constrained, because of a combination of tariffs and the impending phaseout of federal solar-energy tax credits. The former has put a crimp on foreign competition, while the latter has led to some hoarding by panel buyers.
"We have not been in a normal market for a while," said Eric Pasi, chief development officer of Roseville-based IPS Solar, a solar panel installer.
Indeed, Heliene's sales slipped from $90 million in 2017 to only $45 million last year - not enough to generate a profit - as the company got snared between the imposition of U.S. tariffs in February 2018 and the September startup of its Mountain Iron plant. "2018 was a disaster," Pochtaruk said.
But once the company's Mountain Iron operations kicked into gear, Heliene was poised to take advantage of the tight market. "Heliene's panels have found a niche and are doing very well," Pasi said.
Indeed, Heliene expects to do more than $100 million in sales this year and is adding 35,000 square feet to the 25,000-square-foot plant here. "We are bursting at the seams," Pochtaruk said.
Pochtaruk founded Heliene in 2009 in Sault Ste. Marie after a 20-year career in the steel business. "After working for years polluting the planet, I'm making up for it," he said.
A native of Argentina who speaks five languages - Spanish, French, Italian, English and Portuguese - Pochtaruk is "a theoretical physicist by trade." He didn't want to be an academic, so he went into "applied physics" - i.e. steel. He spent the last several years of his former career at Algoma Steel in Sault Ste. Marie.
Heliene started exporting panels from Canada to the United States in 2015. In that same year, Pochtaruk set up a small operation in Minnesota take advantage of Made in Minnesota, a popular rooftop solar subsidy program. Heliene eventually contracted the manufacturing of its Made in Minnesota panels to Silicon Energy, another panel maker in Mountain Iron.
But the Legislature killed Made in Minnesota in 2017, citing its cost. During the program's waning days, Heliene was running the Mountain Iron plant - with a crew of six - after Silicon Energy had essentially folded. Silicon Energy, which had opened in 2011 and gotten some public funding, was never a major employer.
It was a small victim of the competitive onslaught from Asia, the world's primary source of solar panels. A bigger casualty was Ten K Solar, which once employed 90 workers at its Bloomington headquarters and another 110 at factory in Shanghai. It shut down in 2017.
Heliene found itself in trouble by early 2018.
That's when Trump's 30% tariff (now 25%) on almost all solar panel imports - including from Canada - went into effect. Heliene's Sault Ste. Marie plant was suddenly left without access to its major market.
"That triggered the decision to invest (in the Mountain Iron plant) and reposition the company," Pochtaruk said.
More workers, investments
To help finance that strategy, Heliene scored two $1.75 million loans - one from the Minnesota Department of Employment and Economic Development, the other from Iron Range Resources and Rehabilitation Board.
Up to $1 million of those credits will be forgiven if the plant has an employee count of at least 70 over the next few years. (The company is planning to add 25 more jobs in Mountain Iron by year's end, boosting the workforce to almost 120).
Heliene invested $18 million into the plant itself, getting an increase in its bank line of credit.
"We gutted the entire building," Pochtaruk said. Heliene is expanding the plant so it can better house inventory and finished goods; now, it has to contract for off-site storage space.
Heliene assembles solar panels from silicon cells it buys primarily from Taiwan; special solar glass from Malaysia; and other critical materials from Italy. New machines with big robot arms place the 6-by-6-inch cells on the glass and solder them into a full panel.
"A solar module is basically a glorified window," Pochtaruk said. In this electronic window, silicon wafers convert the sun's light into electricity.
About 80% of Heliene's overall sales - including from its Sault Ste. Marie plant - are for utility and commercial solar projects.
Minnesota's Community Solar Garden program has been an important source of business, contributing just under 30% of total sales in 2017 and 2018. Under that program, solar gardens are developed and owned by independent energy companies. There are more than 190 of them, and together they generate the majority of Minnesota's solar power.
Heliene's commercial sales are evenly spread between the central and northeastern U.S., while its residential sales are in four sunny states: Florida, Utah, Nevada and California.
Most of Heliene's panels destined for the residential market are made in Mountain Iron.
"It's an area of the market that looks for a 'Made in America' product," Pochtaruk said. "It's the way solar installers are selling it."
Impact of tariffs
Tariffs have certainly leveled the playing field for solar panel manufacturers based in the United States, said Xiaojing Sun, senior solar analyst at global consultancy Wood Mackenzie.
But "in the short term, if not for this type of tariff, I do not think Heliene would be able to cost effectively compete and expand in the U.S.," she said.
Minnesota solar industry executives say Heliene is competitive and offers upsides that big suppliers in Asia can't.
"Heliene's price per watt is on the lower side," said Ryan Butterfield, energy services director for Werner Electric, a Cottage Grove wholesaler of solar panels and other electrical equipment. "It's a tier-one manufacturer with a very competitive price."
Pasi, of IPS Solar, said Heliene's "availability" in a tight and unstable solar panel market works to its advantage. "Heliene is in a good position to pick up a lot of business by having panels produced locally."
Earlier this month, Pasi said IPS canceled a large order from India after the Trump administration effectively slapped a 25% tariff on solar panels made in that country. A new order to an Asian manufacturer could have taken weeks to fill. So IPS called Heliene, which was able to kick out the panels needed, Pasi said.
Heliene was the first new U.S. solar panel plant to open after the Trump tariffs last year. Three other plants in the Southeast opened this year, and all of them are larger and owned by major Asian panel manufacturers. One has more than 10 times the capacity of the Mountain Iron plant.
Heliene can produce up to 140 megawatts - a measure of power production - annually in Minnesota, which equates to 415,000 finished solar panels per year. Heliene is looking to establish a second U.S. factory in the Northwest or Southeast.
Geographic diversity in manufacturing could help it win more customers.
"This is the first facility we have in the U.S.," Pochtaruk said as he walked the Mountain Iron factory floor. "Though it won't be our last."
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