Another Taxpayer-Funded Solar Company Looks Like a Failure

Biden Strickland photoAn Ohio-based solar company received millions of dollars in state and federal subsidies despite government officials’ knowledge that the company was in financial trouble, and now a local newspaper reports little activity at the manufacturer’s Perrysburg plant.

According to a report last month in The Toledo Blade, Willard & Kelsey Solar Group was lent $10 million by two state agencies even though the company showed little more than a half million dollars in revenue for 2009 – that being a grant from the Buckeye State – and a loss of $4.2 million. State officials told the newspaper that loan was completed because it had already been promised.

“We are just executing that commitment at that point,” Daryl Hennessy, assistant chief of the business services division at the Department of Development, told The Blade. “While it looked like a lot of bad things happened in between, the commitment had already been made. We weren’t giving them any more money at that point. We weren’t adding on additional benefits at this point.” 

Other records show that part of the money that flowed to Willard & Kelsey came from U.S. taxpayers, even though the company told the newspaper it received no federal funding. Reports posted at the Web site, which discloses information about funds dispensed out of the 2009 Recovery Act (aka the “stimulus”), shows a $6 million award to the Ohio Department of Development for its “Energizing Careers” project. Of that, according to a department press release from January 2011, $700,981 went to Willard & Kelsey “for worker training to manufacture highly efficient frameless Cadmium Telluride photovoltaic solar panels….”

The company did not show much of a track record that showed it was a worthy investment. The department press release noted the company began commercial operations in January 2011 “at a state-of-the-art 250,000-square-foot manufacturing facility.” In reality, it was more “art-of-the-state.” 

“The company plans for a major expansion within the next six years,” the press release boasted, “building an additional 750,000-square-foot factory and employing 3,600 people.” 

The program and grant were initiated under Ohio’s previous governor, Democrat Ted Strickland (in photo). Current Gov. John Kasich, a Republican, defeated Strickland in 2010.

“These training dollars ensure our workers are highly skilled in manufacturing that supports the evolving technologies that help our economy flourish,” said Lisa Patt-McDaniel, director of the Ohio Department of Development in Strickland’s administration. “By training employees in advanced energy manufacturing, these companies will see continued growth and success in our state.”

Besides the state backslapping, Vice President Joe Biden and Commerce Secretary Gary Locke joined Gov. Strickland on a tour of Willard & Kelsey in June 2009.

“There are far too many valuable resources, too much valuable capital and especially too much human skill and know-how embedded in America’s manufacturing sector to allow it to go to waste,” Biden said in Perrysburg. “The President and I are committed to doing everything we can to prepare the manufacturing sector for the future and to protect families and communities hurt by recent job losses.”

Apparently Willard & Kelsey is another of the Obama administration’s solar failures that fell through the cracks. The Blade reported last month that the company’s development has been marked by delays and “operational issues,” with only one production line started since the company’s inception. Another promised line has been held up, and the company has asked the state to extend a deadline for its initiation to Sept. 2012. But first-hand observations by Blade reporter Kris Turner don’t look promising: 

Four cars were in the company’s parking lot at 3 p.m. Tuesday (March 13). The front door to the facility was locked and no one answered knocks at that door or the employee entrance. Michael Cicak, the company’s chief executive officer and chairman of the board, was contacted by phone but said he was in a meeting. He had previously refused to respond to phone calls from The Blade…. 

The company laid off workers in January because it was making changes to its production line to increase the efficiency of those panels, Mr. Cicak said in a previous interview.

Although Mr. Cicak has said the company employed more than 100 people at times, state documents tell a different story. A document from April, 2011, states the company had 72 employees and intended to create 133 jobs. None of the other documents lists more than 72 employees.

Crony socialism may have contributed to Willard & Kelsey’s friendly reception from state officials under the previous administration. Company employees — mostly executives that included Cicak and President James Appold — donated $24,400 in 2010 to Strickland’s campaign to retain the governorship. The grant to Willard & Kelsey was announced January 5, 2011, five days prior to Kasich’s inauguration.

While not a big illustration from a cost-to-U.S.-taxpayers standpoint, Willard & Kelsey are no less an example of failed government picking winners and losers than are First Solar, Abound Solar, and Solyndra, among others. It also shows how much the Green energy agenda and policy practices extended to the states. It sure didn’t help Gov. Strickland keep his job.

Paul Chesser is an associate fellow for the National Legal and Policy Center.