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Published: Wednesday, 9/12/2012 - Updated: 2 years ago

2nd area solar firm defaults on state loan

Buckeye Silicon was lent $1.4M

Buckeye Silicon has received state funding from the Ohio Department of Development and the Ohio Air Quality Development Authority. The company missed five months of payments for the authority and is being probed by an accounting firm hired by the state. Buckeye Silicon has received state funding from the Ohio Department of Development and the Ohio Air Quality Development Authority. The company missed five months of payments for the authority and is being probed by an accounting firm hired by the state.
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COLUMBUS — The Ohio Air Quality Development Authority has ruled that a second solar firm in the Toledo area defaulted on a state loan.

The air authority's board found that Buckeye Silicon violated several terms of its $1.4 million loan. The company missed loan payments or made partial payments and was not compliant in six areas highlighted in a report reviewed by the air authority's board at its meeting Tuesday.

"They have been uncooperative with us, and they got themselves behind when their payments were very small," said Jeff Jacobson, a member of the air authority's board.

This marks the second time in less than a month that the air authority has demanded repayment of a loan from a Toledo-area solar company. It ruled during an Aug. 23 meeting that Perrysburg's Willard & Kelsey Solar Group was in default of a $5 million loan.

The balance of that loan, more than $4 million, is due to the air authority today.

Buckeye started to miss payments in December, 2011, and continued to miss them through April of this year. The firm paid $1,890 in April for the December payment and covered the rest in a lump sum paid June 4. Those payments totaled $10,052.

The company was expected to start making payments of $25,163 on the principal in May and hasmade only partial payments since that time. The delayed delivery of a key piece of equipment to Buckeye created a gray area for when it was supposed to begin making full payments to the air authority, officials said.

Mark Erickson, a manager at Buckeye's Ryder Road facility, declined to comment on the air authority's decision.

Buckeye is owned by Sphere Renewable Energy Corp. of California. It produces polycrystalline silicon, which is used in solar panels, and got its start at the University of Toledo's alternative energy incubator in 2009.

It is unclear when Buckeye will have to repay the balance of its loan because the air authority's board is in the process of hiring an attorney to handle the matter. The cost of doing so has not been determined, said Todd Nein, interim executive director of the air authority.

"We don't have expertise with that with inside counsel," Mr. Nein said.

Hiring outside counsel will escalate the air authority's costs associated with Buckeye. The company's financial viability is being investigated by GBQ Partners LLC, a Columbus accounting firm, for up to $50,000. GBQ has not submitted a written report to the air authority and has conveyed its findings orally.

An exact figure of how much Buckeye owes the air authority was not available. Mr. Nein said a letter demanding payment will be sent to Buckeye, but he declined to lay out a specific time frame for when that letter will be mailed.

Buckeye Silicon has received other state financing: It was awarded a $1.3 million loan and was approved for a $239,000 grant from the Ohio Department of Development. The firm received only $4,867 of that grant because it did not create the 75 jobs called for in the grant contract.

Mr. Erickson told The Blade in an Aug. 29 interview that the company had four employees.

At the air authority board meeting, members discussed concerns about the board not being made fully aware of problems that arose earlier this year with loans to solar companies. The attorney hired to recoup Buckeye's loan also will be charged with evaluating the loan servicing process used to monitor troubled loans or ones in default that were granted under the Advanced Energy Job Stimulus Program.

The program consisted of $150 million for the development, production, and use of advanced energy technologies. Administered by the air authority, it ran from 2009 to 2011.

USA Energy Advisors was hired by the air authority to write agreements for the loan recipients and is in charge of monitoring their progress. 

The fees USA Energy charged to the air authority are being calculated by department officials for The Blade.

The air authority plans to review the progress of all loans granted under the Advanced Energy Job Stimulus Program each month, a practice it put into place during Tuesday's meeting.

Gayle Channing Tenenbaum, chairman of the air authority's board, said it is hoped that the practice would make board members aware of progress — or problems — being faced by the loan recipients.

"Had I seen the reports earlier, I would have expected them to do some things differently," she said. "I didn't see the reports, so I didn't know I should have had expectations that they do something different."

Contact Kris Turner at:
or 419-724-6103.

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