Technology
Solar energy panels brighten business
Iowa Thin Film Technologies enters world market
By DAVID ELBERT
REGISTER BUSINESS EDITOR
July 19, 2004
Ames, Ia. - Iowa Thin Film Technologies is on the verge of turning a niche business into a mass market.
In the past 15 years, co-founders Frank Jeffrey and Derrick Grimmer have engineered enough breakthroughs in solar power to bring the small Ames company to the edge of what could be a very bright future.
The company's claim to fame is that with just 20 employees, it is a world leader in the manufacture of flexible solar energy panels.
The company's patented PowerFilm is made in flexible sheets that are 13 inches wide and up to half a mile in length. Some versions carry a durability guarantee of up to 20 years.
PowerFilm is exported to China, where it is used to power radios, cell phones and other small consumer appliances, some of which are imported back to North America. Last summer, PowerFilm was the focus of a worldwide design conference in France.
Earlier this month, the company received a technology award from the U.S. Army for incorporating PowerFilm with tent fabric to create tents that are mobile power sources.
The Army is investigating a variety of alternative power sources, said Steven Tucker, a civilian engineer with the Army's Soldier Systems Center in Natick, Mass.
"Our idea is to make military shelters as dual-purpose structures that not only provide shelter but generate power safely and quietly," Tucker said. The initial design of tents that incorporate PowerFilm in the tent fabric was a "huge success," Tucker said.
The Army's next step will be to order $2 million worth of tents to field test in a variety of climates. If those tests are successful, Army units from all over the world could be placing orders with the Ames company.
While the Army would be a huge customer, even larger possibilities exist, said Michael Coon, Iowa Thin Film's chief operating officer.
The company is working with design engineers to incorporate PowerFilm into roofing material, so that solar panels are attached in a single step as part of the roof.
Much of the cost of solar roof panels lies in the application, Coon said. Eliminating that cost, he said, makes solar energy more affordable for large-scale applications, such as warehouses and remote locations.
Doing business with the military and the building materials industry figures to be more profitable - and more predictable - than consumer electronics, an early market for PowerFilm, Coon said.
The most unique aspect of PowerFilm, said co-founder Jeffrey, is the way it is made. The company's flexible solar cells are produced with a roll-to-roll manufacturing process that took years to perfect.
Iowa Thin Film was founded in 1988 and survived on research grants for much of its first decade.
The company started selling products to power small consumer electronics in 1998. A big break came almost immediately when the Y2K bug threatened to disrupt computers worldwide on New Year's Day 2000.
The fear was that computer-driven power sources would fail when the new year arrived because early computers had not been programmed to recognize the change from 1999 to 2000. The subsequent search for alternative power sources gave a huge boost to PowerFilm.
Before Y2K, PowerFilm's main market was producing solar energy panels for remote locations, such as wildlife feeding stations.
But, feeding on the Y2K scare, Iowa Thin Film's small factory on the west edge of Ames cranked up to near capacity for much of 1999. Consumer electronics jumped from a very small portion of the company's business to 80 percent almost overnight, Jeffrey said.
Jeffrey was expecting demand to taper off in four to six months after Jan. 1, 2000, but it didn't. "It went to zero in one month."
"We didn't have enough other customers brought up at that point, because we had been scrambling" to meet the Y2K demand, he recalled.
That won't happen again, Jeffrey said. "Right now . . . we sell into a very diverse market."
The company now faces challenges that all successful technology businesses encounter when making the leap from novelty to industry, said Mike Upah, a small-business expert at the Pappajohn Center for Entrepreneurship in Ames.
Technology companies start out with a science-based culture. But to succeed in the larger world, they must shift to a market culture.
"It means bringing in people who can sell into the markets you want; people who have Rolodexes and the contacts to make the sales," Upah said. That can be difficult, especially when founders are scientists who can become bored by the business of doing business.
Another problem for successful tech companies is focus, Upah said. Science can open a lot of doors.
"They have dozens of places where they can apply their technology," he said. "The key is to pick markets where they can be successful and focus on them."
Finally, there is the money question. All successful startups ultimately face the issue of raising capital. And because money is synonymous with control, Upah said, it can become a stumbling block.
To date, Iowa Thin Film has been able to operate on income generated from grants and sales. The company is closely owned by the founders and employees, Jeffrey said.
The only debts are bank loans that were used to help pay the cost of building the equipment used to manufacture PowerFilm.
That will change soon, though. The company is in the process of seeking venture capital to help pay for the expansion that will be needed to meet increased production for the Army and other clients, Coon said.
What's next?
The next scientific breakthrough for Iowa Thin Film Technologies' patented PowerFilm will be increasing the amount of sunlight collected by the product's flexible solar panels.
A 20 percent increase in sunlight collection will significantly increase the electrical output, said co-founder Frank Jeffrey.
"There are a couple of tricks (that involve optics) for doing that," said co-founder Jeffrey.
The company is also looking at applying its manufacturing technology to other areas.
Possibilities include making flat-panel screens used for TV sets and computers, and digital memory for camera and audio equipment.
