Update on Columbus (IN)-based solar PV manufacturer NuSun Solar; NuSun weathers storm when others go bankrupt

Posted by Laura Arnold  /   May 30, 2013  /   Posted in Uncategorized  /   No Comments

Dear IndianaDG Readers:

There has been wide speculation about the current status and future of Columbus, Indiana-based solar PV manufacturer NuSun Solar. Hopefully, these two recent articles from local Columbus (IN) newspaper, The Republic, will help to explain. Be sure to read both stories.

As a founding member of IndianaDG, we wish Ryan Stout and NuSUN Solar the best in weathering the tumultuous  storm of bargain basement priced Chinese solar PV panels--many of which are of inferior quality.

Hang in there, NuSun. IndianaDG is rooting for ya! Surely this is a problem which a flood of new orders could solve for this American solar company and Hoosier entrepreneur.


Laura Ann Arnold

Part 1: Firm given incentives hasn't met quota

By John Clark, Jclark@therepublic.com

Sunday, May 26, 2013

Columbus officials are seeking answers from a solar panel manufacturer that took almost $900,000 in local and state incentives but is not meeting hiring expectations.

Depending on the answers, the city could force Nusun Inc. to begin making payments on its building or even start foreclosure proceedings on the company's property.

The city already has cut off one $600,000 funding stream for the manufacturer.

At issue is whether Nusun is meeting the hiring promises it made in 2011 when local officials provided $325,000 in city and county funds and helped secure a $500,000 grant from Lawrenceburg casino revenues. Nusun had promised to have 80 employees by the end of 2012, but a state report shows it has only 15.

The company was required to provide the city with an annual status report by May 15 documenting its compliance with the agreement. As of Friday, however, the city had not received the 2013 status report, nor can it verify that the company filed a 2012 status report, City Attorney Jeff Logston said.

Since the deadline passed, the city has called, emailed and mailed a letter to the company seeking information and so far has received no response.

Nusun was required to file quarterly reports with the state to meet the requirements for those grants. The February report to the Indiana Office of Community and Rural Affairs showed 15 employees. At the end of last year, the city - which administers the IOCRA grant - filed to cut off the funding and heard nothing in response from Nusun, Logston said.

Attempts to reach Nusun Chief Executive Officer Ryan Stout by telephone Thursday and Friday were unsuccessful.

Mayor Kristen Brown said the city gave the company $125,000 in economic development income tax revenues, the county gave $100,000 in EDIT funds, and the Columbus Redevelopment Commission gave $100,000 in funds from the city's tax-increment financing districts.

"The city has effectively acted like a venture capitalist here, making a bet on a startup company and technology," Brown said.

In exchange, the company agreed to the 80-employees minimum by the end of 2012 with an average wage of $20.31 an hour. To be in compliance, the company should have had 80 percent of those hired by the end of 2012, or 64 employees. A state report, filed in February, showed it had met 19 percent of its staffing requirement.

By 2020, the company was expected to have 240 full-time workers and an annual payroll of about $10 million.

Brown said the city holds the mortgage on the company's $580,000 property on International Drive. As long as the company met its targets, the city agreed to forgive the monthly $6,875 mortgage payments, she said. The city already has forgiven $178,750 in loan payments, Brown said.

If Nusun is found by the City Council not to be in substantial compliance, the city could stop forgiving the monthly mortgage payments, Brown said. Eventually, if the company does not make those payments, the city could foreclose on the factory.

"It is not something that we would want to do," Brown said. "Obviously, the city would prefer that the business be successful and meeting its obligations."

The company was given access to a $600,000 line of funding through IOCRA, which reimbursed certain expenditures. So far, the company has used $71,349 of that funding.

The issue will be brought before the Columbus City Council at its June 4 meeting, Brown said. It's likely the council then would conduct a public hearing June 18, when company officials would be asked to attend and report on their progress.

City Council President Ryan Brand said council members first heard about the issue last week and will wait to hear all the facts before making a decision.

"I typically don't like to make any decisions until I make sure that I have collected all the information I can get my hands on," Brand said. "I want to make sure that I am confident in understanding before I am really ready to make a decision on what is going to happen here."

The decisions to offer the incentives were made by a previous City Council and mayor based on the best information they had available, Brand said. Nobody can predict whether a business will succeed or fail, he said.

Brand would not speculate on whether similar incentives should be offered in the future.

When considering incentives such as tax abatements, in which companies also have to meet employment promises, the current City Council members strongly believe that companies should meet the commitments to keep those incentives, Brand said.



Title: Nusun Inc.

Content: What: A solar panel manufacturer that received local and state incentives in 2011.

Incorporated: 2009.

Where: 12,500-square-foot building at 7440 S. International Drive, Woodside Industrial Park.

Expected employees as of December 2012: 80.

Actual employees as of February 2013: 15.


$125,000 in Columbus EDIT funds.

$100,000 in Bartholomew County EDIT Funds

$100,000 in Columbus TIF funds

$500,000 grant from Lawrenceburg casino funds.

$71,859 grants out of $600,000 possible from Indiana Office of Community and Rural Affairs.

Monthly mortgage payments being forgiven: $6,875.


Part 2: Solar firm on way back

By John Clark, Jclark@therepublic.com

May 29, 2013

The top executive of Nusun Inc. said his company has survived where other solar energy companies have failed and he plans to tell Columbus City Council that the business is making progress.

City officials said last week that they were concerned that Nusun had not met employment goals promised in 2011 when the city, county and state came up with almost $900,000 in incentives for the Columbus company.

The city holds the mortgage for the company's plant on International Drive in the Walesboro Industrial Park but is forgiving the monthly payments. The city could start making the company pay back the loan or even foreclose on the property, Mayor Kristen Brown said.

Ryan Stout, the company's chief executive officer, said the solar business has taken a huge hit in the past two years, as Chinese companies were willing to lose hundreds of millions of dollars to try to corner the solar energy market. Stout said that glut of panels has disappeared and now his company can produce panels for about the same price as the overseas competitors at higher quality.

In the meantime, Nusun has "battened down the hatches," Stout said, and tried to weather the storm. In the past year, 500 solar energy companies have gone out of business, he said.

"We could see the shakeout happening, and my goal was not to just be another company that goes out of business," Stout said.

"And now we are in a perfect position to get business that was going to the Chinese."

The company recently received a $400,000 contract for 2,100 panels in northern Indiana, Stout said. That will allow him to bring eight part-time employees to full time, for a total of 15 employees.

The agreement with the city and county called for 80 employees at the end of 2012. Stout said the temptation could be to take every dollar available, hire 80 employees and then fire them all, but instead Nusun has taken a slower approach.

Stout said the company deliberately decided not to use an entire $600,000 grant from the Indiana Office of Community and Rural Affairs for equipment purchases, instead using just over 10 percent of the money. The grant had a two-year window and ended at the end of last year.

"Why spend taxpayer dollars on equipment that we don't need, just because it is available?" Stout said.

One of the concerns of city officials was that Nusun has not been filing compliance reports each year. The company has been filing quarterly reports for the IOCRA grant and did not realize that the city needed a separate report for the local money, Stout said. He said he plans to speak with City Attorney Jeff Logston and get that report filed soon.

Stout said he looks forward to the opportunity to explain the company's progress to the city.

"I am not ashamed of what we have done because we are still in business and we are growing," Stout said. "I don't mind going in front of City Council and explaining what we have done and why we have done it."

Should the city start charging the company the $6,875 monthly mortgage payment that is now being forgiven, it would damage the company at an especially sensitive time, Stout said.

"Honestly, that would kill our business," Stout said. "It would add so many more expenses into our equation."

John Clark, senior reporter  jclark@therepublic.com
The Republic                       Ph: 812-379-5769
Columbus, Ind.                   Toll Free: 800-876-7811 ext. 769
47201                                   Fax: 812-379-5711

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