LANSING – Small auto-supplier based manufacturers looking to diversify into other areas were encouraged to apply for federal stimulus funds for alternative energy manufacturing, Gov. Jennifer Granholm said Monday.

The state now has $15 million through the American Recovery and Reinvestment which can act as financial assistance to companies looking for expand into alternative and renewal manufacturing systems, Granholm said at a media roundtable Monday.

Companies interested in the funds have until August 14 to apply, said Granholm, who was joined by Energy, Labor and Economic Growth Director Skip Pruss. Applications are available on the DELEG website.

Successful applicants must use the funds for leverage to move into the alternative energy manufacturing arena, Granholm said.

Where most of Michigan’s economy contracted during 2008, Granholm said the alternative and renewable energy sector grew by some 7.7 percent during the year.

And with the $15 million in stimulus funds, the state and federal government has committed about $1 billion in credits and direct funds to help promote alternative and renewable energy development, Granholm said.

While governors in virtually every state are taking steps to promote alternative energy development there, Granholm said the U.S. Department of Energy said Michigan is among the top five states with the greatest potential for wind energy development.

She said wind energy does hold a lot of potential for manufacturers since the turbines use blades, gears, rotors and driveshafts, all equipment manufactured in the state for vehicles and other purposes.

Plus, the state’s central location could help manufacturers because it would cost less to ship the large parts to various locales around the country, she said. As much as 30 percent of the cost for wind turbine parts is just in the logistics of shipping them, she said.

And if Congress passed legislation to boost alternative energy development, the controversial so-called cap and trade bill, that could help drive demand for the equipment and in turn help the state’s economy.

Granholm said she has also urged the federal government to help open up access to financing to suppliers. With the troubles the auto industry is undergoing, banks are more reluctant

In a related issue, Granholm said she hopes that most the federal awards for advanced battery research and development, expected at the end of the month, would go to the state. She said that her administration had urged the federal government to base its award decisions solely on merit and not try to spread them around to different sites to meet political needs.

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