Minnesota firms grow an industry focused on renewable energy, conservation and software analytics

In 2018, HOM Furniture invested about $60,000 in an energy-management software solution made by Burnsville-based 75F for HOM's Plymouth store. HOM has saved $50,000 in the first year, nearly recouping its investment and cutting annual energy costs by 21%.

"We want to be good environmental stewards," said John Pierce, real estate director for HOM. "We are happy to see our operating efficiency and lower energy consumption and look forward to seeing what 75F can do in our other facilities."

CEO Deepinder Singh, a computer scientist who launched 75F in 2012, is running a 125-employee company that is doing business in the United States, Singapore, India and other countries with clients seeking to cut energy bills and pollution.

"HOM is a good example because they got an [internal rate of return] of 80 or 90% in the first year," Singh said. "It's good for the environment, for our Minnesota-based business and for HOM. Our customers typically get a two-year payback on their investment."

In September, 75F raised $18 million in venture capital, one of the biggest hauls this year for a Minnesota company, from institutional investors that will enable it to scale up operations to meet global demand.

"We have doubled our employment over the last year and we expect to employ 200 within a year," Singh said. "We just signed a deal with Singapore Power, the state-owned utility, and they will use 75F exclusively as their building-control technology."

"Our goal is to transform building controls," he continued. "We believe the technology we are pioneering one day will be ubiquitous. We are not there yet but we are in the vanguard. There is economic incentive. An environmental incentive. And you can make your people more comfortable and productive. It should be a no-brainer decision."

Meanwhile, HOM is moving forward with installing 75F systems in all 18 of its Upper Midwest locations.

75F is a poster-child example of the mostly small businesses that are the growth leaders of the Minnesota economy, at the intersection of energy efficiency, renewable energy, environmental considerations and next-generation software and technology.

President Donald Trump may have taken aim at efficient light bulbs, low-flush toilets and wind power, but they are economic and environmental winners. Thousands of businesses and millions of consumers have embraced products and practices of a greener economy.

Executive Director Gregg Mast of Clean Energy Economy Minnesota said this fall: "Small businesses are the growth engine for clean-energy and efficiency jobs. That sector in Minnesota grew jobs 2.5 times faster than overall job growth in 2018. And 72% of those jobs were companies that employ fewer [than] 20."

Renewables now account for about 25% of Minnesota power production. Policymakers and utilities are talking about doubling that by 2030. At the same time, the state aims to cut greenhouse-gas emissions by 30% by 2025 and 80% by 2050.

Minnesota lacks fossil fuels. But it has created a renewable energy and efficiency sector that relies on brainpower, software and renewable resources; a homegrown industry that employs 60,000-plus jobs, including wind technicians, solar installers and related software jockeys; electricians, engineers and support workers.

Meanwhile, the cost of solar energy has dropped by 80% over the past decade and wind by about 65% since 2009, according to Mast.

The Solar Energy Industries Association said Minnesota employs 4,600 in the young industry. And the sector, which generates about 2% of Minnesota power, expects to more than double its output within a few years.

St. Paul's All Energy Solar is a decade-old firm that has more than doubled its space with a move to Energy Park. All Energy designs and installs residential, commercial-rooftop and on-farm solar installations. It's hiring and training workers who make up to $60,000 as installers. Some become electricians who can make up to $90,000, along with other jobs. It now employs 150 people.

"It's been challenging to hire good, competent people and train them," said co-founder Michael Allen. "It's hard work. But it's also an opportunity. We can train anybody with a good attitude. Some people don't want to be installers all their lives. In 2019, we trained five installers who became journeymen electricians and we have another seven or eight who will be taking their exams in 2020 to become electricians."

This fast-growing slice of Minnesota's economy isn't just about energy.

Sentera, the agricultural drone and data-analysis software firm, has raised $24.5 million in private capital over the past three years to help make thousands of food producers more efficient around the globe.

The Richfield-based company this month announced a long-term partnership with Anheuser Busch InBev to help the company improve productivity by using Sentera technology to deliver "agronomic insights" with "acre by acre precision to spot problems and precisely apply water and other inputs."

"We sell through a Bayer or Land O'Lakes or a cooperative and they do the training [with growers] from Minnesota to Africa," said CEO Eric Taipale. "We're pretty cheap technology. We make incremental revenue on the analytics, the software tool that counts corn plants or spots water or pest damage. The customers pick from a menu of our products that work for them.

"Corn and soybeans, in terms of acres, are the biggest business for us," he added. "Sentera software is used for digital crop 'scouting' and analytics in 62 countries."

Sentera has grown from 12 to 60 employees and revenue has increased by six times since 2015 to more than $4 million.

Neal St. Anthony has been a Star Tribune business columnist and reporter since 1984. He can be contacted at nstanthony@startribune.com.