OKCBusiness
By Randall Turk 

Escalating oil prices once again have Americans thinking in terms of alternative and renewable energy sources.

In Norman, a company powered by the state’s abundance of wind over the past 30 years is ramping up to meet the challenge.

“Our business has been growing at the rate of 25 percent a year over the past few years,” says Mike Bergey, president of Bergey Windpower.

Bergey engineers and manufactures small wind turbines that produce electricity for homes, small businesses and specialized applications.

Ironically, the company does not sell its products in Oklahoma, a state said to be the eighth windiest in the country.

Similar to the federal government, Oklahoma has failed to provide economic incentives for alternative energy customers because of historically cheap prices for hydrocarbon fuels. But soaring petroleum prices in recent years could usher in a new era for wind power, Bergey believes.

A 10-kilowatt wind turbine, the most common size Bergey now manufactures for homes, can cost $40,000 or more, including installation.

A 1978 federal law established that electric utilities must accept surplus power from these small turbine generators and credit customer accounts for the power they produce. Still, authorities say a period of 20 or more years is required for wind turbines to pay for themselves in terms of energy cost savings.

A tax credit market

The absence of tax credits to soften the high equipment cost has discouraged sales to Oklahoma and Texas customers, Bergey said.

“Our domestic sales have been concentrated in California, Vermont, New York, New Jersey and Massachusetts,” he said, states where generous tax credits apply.

But help could be on the way.

Bergey sees hope in House Bill 1387, which would place Oklahoma with 20 other states that provide tax credits, rebates or grants for small wind systems. The bill, authored by Reps. Randy Terrell, R-Moore, and Bill Nations, D-Norman, could provide a tax credit of up to 40 percent for homeowners, farmers and small businesses that invest in wind energy equipment. HB 1387 gained House approval this year. A federal tax credit for wind and solar power also is being considered.

“If we get the federal tax credit and our market grows to all 50 states, we could see our production rate double every year,” Bergey said.

Grounded in aviation

Bergey Windpower was launched by Mike Bergey and his father, Karl Bergey, in 1977. The elder Bergey, an aircraft designer and University of Oklahoma aeronautical engineering professor, had been responsible for developing several airplanes for the Piper and Aero Commander aircraft companies. He said designing an efficient, cost-effective wind turbine is “just as challenging as designing an airplane.”

“Testing both involves aerodynamics, structural analysis, wind tunnel tests and extensive in-flight operation,” he said.

The company grew rapidly until 1986, when the Reagan administration did away with tax credits for alternative energy, Karl said. Because the federal credit expired, Oklahoma’s wind power tax credit, effective in 1985, was not used. The world price for oil dropped to $10 a barrel,” Karl said. “Much of the wind power business collapsed. Of 40 or 50 companies in the U .S. that manufactured and sold small wind turbines, we were the only one to survive without going through bankruptcy.”

In 1992, a similar initiative for a three-year Oklahoma tax credit for wind power failed to catch hold with the failure of President Clinton’s initiatives for alternative energy.

The Bergeys said they went without salaries and trimmed staff to survive the downturn. More importantly, they soon turned to global sales, exporting their products to developing countries for projects such as rural electrification and drinking water supply. The company first concentrated on India, later exporting wind turbines to South America, Indonesia, Russia and China.

Exports still vital

More recently, Bergey wind turbines have been going to Vietnam, Japan and the Philippines.

“Last year, we had a contract with North Korea,” Mike said. “We can trade with North Korea unless the products are military or nuclear-related.”

Bergey recently completed a large project for Safaricom in Kenya, the largest cellular phone company in East Africa. Wind turbines power Safaricom’s base stations in remote areas.

Bergey manufactures several patented wind turbine models producing between 1 and 10 kilowatts of electricity.

“Our turbine designs are the absolute essence of simplicity,” Karl said. “They operate automatically and have only three moving parts. They can run 24 hours a day over at least a 30-year life.”

The company is testing a 50 kW model for larger businesses and developing a 5 kW wind turbine for homes and other smaller applications.

Expanding here and abroad

For years, Bergey Windpower operated in an 8,000-square-foot building on University of Oklahoma’s North Base. The building, which served as a Navy commissary and kitchen during World War II, was demolished shortly after the company moved across Highway 77 into a former beer distribution plant in August 2005. The new facility tripled Bergey’s manufacturing capacity. Other investment has gone into streamlining operations and upgraded tooling. There are 29 employees.

Bergey also operates a factory in China that assembles wind turbines exclusively for the Chinese market. Other efforts by the Chinese have not been as successful, the Bergeys said.

“The Chinese have copied turbines from the Bergey plant and exported the knock-offs to other countries,” Mike said. That competition has lessened because of reliability issues, he said. “We keep a number of trade secrets, and nobody gets those.”

Demand remains strong

Earlier this month, Bergey Windpower was notified it has been approved to supply 10 of its 10 kW turbines for a village electrification program in the Panjshir province of Afghanistan – a $300,000 contract.

“There’s an increased emphasis on renewable energy in Afghanistan and Iraq because insurgents attack fuel convoys,” Mike said.

On the home front, the Bergeys see a huge latent market for wind power.

“We get bombarded with calls from Oklahoma and Texas,” Mike said. “There’s still that 20-year payback without an energy subsidy.

“We tell people to hold onto their wallets and do what they can to conserve energy until the government restores tax credits. We’ve been saying that for 20 years.”

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