Minneapolis/St. Paul Business Journal | March 19, 2010
by Alex Ebert, Staff Writer
Development business stalled for energy firm, but service business thrives
When the wind shifted on Outland Renewable Energy, the wind farm developer shifted right back. The result? Business took flight.
Canby-based Outland changed its emphasis from project development to servicing existing farms and found itself in a booming industry. The private company’s revenue has soared from $400,000 in 2006 to more than $15 million last year, President and Chief Operating Officer Steve Scott said.
While other companies suffered as capital dried up in the recession, Scott said Outland was benefitting as existing wind farms’ warranties ran out on their equipment. The firm saw an opportunity and jumped on it.
“If there’s a commercial wind farm, we have technicians that have, or are, or will be in the area,” Scott said. The company’s service branch, Outland Renewable Energy Field Services, now has 140 employees nationwide and wants to hire another 40 to 50 full-time employees by year’s end. Outland’s other branch, Outland Renewable Energy Development Services only has a handful of employees dedicated to developing new projects.
Winner of the ‘gold rush’
Leon Steinberg, CEO of Minneapolis-based community wind developer National Wind, said that companies like Outland are the big winners of the wind energy market.
“I made the comparison to the gold rush days,” Steinberg said. “It wasn’t the miners that were making the money consistently, it was the ones selling picks to the miners that were doing well, or the Levi’s jeans.”
Jeff Wright, president of Midwest Wind Finance called Outland’s business model a “smart move,” at the right time.
On top of the recession’s credit crunch, an unsuspected, temporary obstacle came with the American Recovery and Reinvestment Act, commonly known as the stimulus bill.
The bill “froze the industry for awhile” in early-2009 when subsidies were announced for clean energy projects, and creditors held back, waiting for the funds, Wright said.
When the markets “slammed shut” an major federal funding didn’t come out until August, new capital “was nonexistent,” Steinberg said.
But companies like Outland that serviced existing farms were in the clear. During this same time period, Outland tripled in size as it hired to keep up with industry demand.
“The market for maintenance services has grown and will continue to grow,” Scott said. The company manages more than 600 megawatts of electricity, making it one of the largest wind energy operation and service firms in the country.
Future breezes seem strong for industry
Many Minnesota company leaders feel optimistic about the future of wind. After the learning curve on the stimulus funding was overcome and the market picked up, 2009 became a record year of growth for U.S. wind power.
The American Wind Energy Association said that cumulative wind energy production grew 40 percent in 2009, according to its annual report from that year.
“I think it will definitely pick up again,” said Mark Willers, CEO of Luverne-based Minwind Energy and former chairman of several United States Department of Agriculture committees.
Willers, as well as other company leaders across Minnesota, think foreign interest in the growing U.S. market, as well as a prevailing appreciation of clean energy in the nation’s current politics, will help build back wind farm development and keep farm maintenance and operation profitable.
This article appeared in Volume 27, Number 42 of the Minneapolis/St. Paul Business Journal on March 19, 2010, page 16.