Despite millions in government grants and subsidies, the Manitowoc company President Barack Obama called a glimpse of the future lost $4.2 million last year and cannot promise shareholders it will be profitable in the foreseeable future.
Even Orion Energy Systems admits there are a lot of risks and uncertainties in the green energy industry.
“Many technologies do not become commercially profitable products, applications or services despite extensive development and commercialization efforts,”the company stated in its most recent 10-K SEC filing on June 14, 2010.
The last five years have been a rollercoaster for Orion. It lost a total of $3.9 million in 2005 and 2006, made $4.3 million in the next three years, and then finally lost $4.2 million in the 2010 fiscal year.
“We may continue to incur further net losses and there can be no assurance that we will be able to increase our revenue, expand our customer base or be profitable,” the report indicates.
Investors have responded to the company’s volatility, and Orion stock has plummeted in the past four years. It closed 2007 at $18.82 a share. By the end of 2010 it was $3.34.
Regardless, President Obama is putting his, and the U.S. taxpayers’, money on companies like Orion.
“It’s important to remember that this plant, this company has also been supported over the years not just by the Department of Agriculture and the Small Business Administration, but by tax credits and awards we created to give a leg up to renewable energy companies,” Obama said at the Orion plant on Wednesday.
The State of Wisconsin has also given its share trying to help Orion to succeed. Since 2005, the state has given the company $350,000 in community development zone tax credits, $506,000 in economic development funds, and $420,000 from the Wisconsin Energy Independence Fund. Plus the company got another $260,000 in stimulus funds for a State Energy project.
In addition to direct aid, public policy has also helped the struggling company. Wisconsin law requires that 10 percent of all electricity sold in the state come from renewable sources by 2015. Orion knows that without government intervention like that, there would be little prospect for the green economy.
“The reduction, elimination or expiration of government mandates and subsidies or economic or tax rebates, credits and/or incentives for alternative renewable energy systems would likely substantially reduce the demand for, and economic feasibility of, any solar photovoltaic and/or wind electricity generating products, applications or services and could materially reduce any prospects for our successfully introducing any new products, applications or services using such technologies,” the SEC report states.
Currently Orion has about 250 workers and, according to Obama, could have as many as 300 working there by the end of the year. However, tracking green jobs and the return on that taxpayer subsidized investment can be difficult to track, as the MacIver News Service reported in 2010. At that time the wind industry was claiming thousands of manufacturing jobs directly tied to wind energy, but MacIver News Service was only able to identify three dozen jobs, after calling every single primary manufacturer on the wind energy industries database.
Regardless, as evidenced by his State of the Union Address and his comments in Wisconsin this week, President Obama policies will continue to emphasize green energy companies like Orion Energy Systems in Manitowoc.
