Published in Manufacturing

State energy retrofit grants spur investments, savings for small manufacturers

BY Sunday, February 02, 2020 07:00pm

new program aims to incentivize small manufacturers to take on energy efficiency projects and “jump-start” energy waste reduction, ultimately helping them reduce their energy use, lower costs and become more competitive.

The pilot program from the Michigan Department of Environment, Great Lakes, and Energy (EGLE) started last year with a group of applicants based in the Upper Peninsula. Now, the department is offering the Small Manufacturers Energy Waste Reduction Incentive Pilot to any Michigan manufacturer with 500 or fewer employees. The program can provide up to $15,000 in funding per company, said Robert Jackson, assistant division director of the materials management division at EGLE.

John Behrens, Co-founder, Farmhaus Cider Co. COURTESY PHOTO

Farmhaus Cider Co. recently used the grant to fund a backup power generator at the company’s manufacturing facility in Hudsonville, according to co-founder John Behrens. 

“Our location is more rural and the power goes out often — six to seven times a year,” Behrens told MiBiz. “Doing the types of things that we’re doing making cider, that can cause a lot of problems and is just bad news all around.” 

The Small Manufacturers Energy Waste Reduction Incentive Pilot was the first statewide grant that Farmhaus has received, said Behrens, who estimated the grant was worth approximately $3,000. 

Companies are required to match the grant on at least a one-to-one basis. Behrens said Farmhaus ended up paying for more than half of the project. 

“(The generator) was something we definitely thought about, because we were running into so many issues with the power going out so often,” he said. “Then we learned about the grant, and it helped tip the scales in favor of doing it sooner rather than later.”

P.M. Power Group Inc. (PMPG), owner of White Pine Copper Refinery in Ontonagon County, was one of the first manufacturers to receive pilot funding. The company, which processes low-grade copper into a purer product that can be used as the primary raw material for making copper rod for the wire and cable industry, used the grant to invest in machinery upgrades. 

The improved equipment reduces the overall energy consumed by the machines through greater control of pumps and methods, according to Zachary Halkola, COO at PMPG. 

“We have raw material and a solution that has to circulate through our digestion vessels,” Halkola said. “What this (upgrade) allows us to do is control the speed within the vessel and to lower the speeds along with the pressure. It saves energy on the front side, but then we get a more efficient digestion on the back side.”

The copper products that PMPG recycles have historically been sent overseas for processing, but through rapid research and development, PMPG now produces a 99.9 percent pure copper product locally, according to Halkola. 

“Over the last decade or so, when these products were going overseas, they weren’t up to the best environmental specs,” Halkola said. “Our (domestic) environmental regulations are much tighter and we’re able to function within permitted limits of the state.” 

The company currently has 11 employees and expects to hire 15 more people this year. 

“This grant really helped us save on the energy side of things and save some big picture costs while we’re still growing,” Halkola said. 

PMPG used less than $1,000 in matching state funds for their initial energy project, but the grant has sparked more interest in similar plans at the facility. 

“This kind of opens our eyes,” Halkola said. “We’re actually looking at some larger pumps that we’re working on. The savings would be significantly larger. It could be about $7,000 per month in savings.” 

The company recently received a separate $425,000 Recycling Market Development Grant from the state. Halkola partially credits the success of that application to the relationships and opportunities that developed through the energy reduction pilot.

“We are impressed with the overall recycling initiatives that are coming out and the energy waste initiatives,” he said. “Those are all things that are going to help keep businesses going, whether it be for costs, whether it be for sustainability incentives. Those are important pieces for investors.” 

Often, small businesses need help gaining the resources to initiate energy projects that can save them money, funds that can ultimately be reinvested into their businesses, said Jackson of EGLE. 

Grants from the Small Manufacturers Energy Waste Reduction Incentive Pilot are available for a range of activities including technical assistance services from energy assistance programs; energy efficiency training courses or workshops; enrollment in energy efficiency programs; benchmarking; or boiler, chiller or furnace tune-ups.

For his part, Halkola said PMPG will be working closely through local economic development groups and directly with the state to research additional available funding and how it could fit the company’s overall business plan.

“I can say we would be doing a lot more of these grant applications because we know there are efficiencies we could gain within the plant site,” he said.

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