It's taken a while to get there, but Willard & Kelsey Solar Group LLC contends it is on the verge of a breakthrough.
After nearly three years of delays in its announced production schedule, the Perrysburg solar panel manufacturer started commercial production last month.
Its first line is running at about 20 percent of its capacity.
But the firm's top executives say they hope that line will reach full production — 120 to 140 panels an hour — by mid-March.
It expects by year's end to have 250 employees, up from about 90 now, paying an average wage of $21 an hour.
Chief Executive Officer Michael Cicak said the company plans to run four production lines out of its 262,000-square-foot plant along State Rt. 25 in the next 18 months, generating each year about 300 megawatts of solar capacity, or 4 million panels.
If the company can perfect its production process, Mr. Cicak said, it will be well on its way to making millions of solar panels and creating thousands of jobs that it has been promising since it opened in 2008.
"Never, ever in the history of solar has anybody tried to produce the quality and quantity that we're trying to produce," he said.
The start-up wants to be the lowest-cost producer of solar panels in the world, although Mr. Cicak won't say whether he thinks Willard & Kelsey can beat the pricing of First Solar Inc., a Toledo-born company that is one of the world's largest solar panels makers, with a large manufacturing facility in Perrysburg Township.
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Both companies make cadmium telluride thin-film solar panels, which are typically cheaper than silicon panels.
Monique Hanis, spokesman for the Solar Energy Industries Association, said thin-film panels are one of the fastest-growing sectors of the solar industry.
Although they're slightly less efficient than silicon solar modules, their lower price makes thin-film panels an competitive option for solar installations worldwide.
"Everybody in the industry is working really across the entire supply chain to bring down the cost of solar," she said, adding that a past silicon shortage also helped thin-film sales.
Willard & Kelsey asserts that its production speed and proprietary coating process, along with other patented technology, will make the difference in its pricing.
First Solar coats its panels horizontally; Willard & Kelsey coats its vertically, allowing for faster production and lower costs, Mr. Cicak said.
Mr. Cicak, who worked with First Solar founder Harold McMaster in the 1980s and 1990s, also said his ties to First Solar's early history provide insight that can help Willard & Kelsey compete with the rival $2.6 billion public company that now is based in Tempe, Ariz.
Mossie Murphy, the chief financial officer, said Willard & Kelsey won't "come out with a price that skews the marketplace," although he said the company's growth potential hinges, in part, on its price competitiveness.
"Price is a huge component of who's going to survive and who's not going to survive," Mr. Murphy said.
Adam Krop, a solar analyst with Ardour Capital Investments in New York City, said First Solar's panels are priced at about $1.50 a watt.
Willard & Kelsey's average price, Mr. Murphy said, ranges from $1.35 to $1.60 a watt.
First Solar has about 1.4 gigawatts of production capacity worldwide and a lengthy history of solar panel innovation that allow the company to maintain low prices, Mr. Krop said.
"I think it would be a very tall order to really catch up to First Solar on a cost-per-watt basis right now," he said.
A projected oversupply of thin-film solar panels by the end of this year and competition from other major panel makers, such as Colorado companies Abound Solar and PrimeStar Solar, could present challenges for Willard & Kelsey, Mr. Krop said.
"For a small-scale thin-film player, I think it would be kind of a difficult time to try to take market share," he said.
Willard & Kelsey has sold panels to customers in the United States and five other countries, which are scheduled for delivery in May, company officials said.
Earlier panels produced by Willard & Kelsey have been used for testing in Europe and Asia.
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The firm has had difficulty reaching self-imposed milestones.
It announced in 2008 that it expected to begin producing 1 million to 1.5 million solar panels that year and to have 400 employees in the company's first phase.
Production was postponed then because of the nation's credit crisis, company officials said.
The company announced, and then stalled, production and hiring again in 2009 and twice in 2010.
Production setbacks have been a source of contention for the company.
A Florida woman sued Willard & Kelsey last year, saying that it failed to produce panels for a European buyer she secured, costing her a $14.9 million commission on the deal.
Karen W. "Kay" Stripling contended in U.S. District Court in Toledo that Willard & Kelsey "knowingly and repeatedly" misrepresented its ability to produce solar panels that could be certified for use in Europe and delivered to the buyer.
The company, which denied those contentions, reached a confidential settlement with Ms. Stripling last year.
Mr. Murphy said two things have prevented the suburban Toledo firm from sticking to its own production schedule: funding difficulties and delays in receiving the necessary panel-production equipment.
"When we started this endeavor, it was arguably the worst possible time since the Great Depression to try to raise capital for businesses," he said.
Willard & Kelsey officials estimate that the company invested between $50 million and $60 million, including $10.5 million in state loans and grants, to buy about 20 pieces of machinery for its first production line.
The company planned to have the equipment installed by the end of last year.
But officials say the delivery happened later than expected as Willard & Kelsey worked with vendors to perfect and test its machinery.
Mr. Murphy did not name the company's vendors, citing confidentiality agreements, but said the companies are in the United States and Europe.
Outside of state funding, the money for Willard & Kelsey's machinery came from the company's five owners, who include Mr. Cicak, a serial entrepreneur, Mr. Murphy, a former investment banker, and Jim Appold, former owner of Consolidated Biscuit Co.
The company didn't seek outside investors because it wanted to maintain control of its operations, Mr. Murphy said.
"Once you start taking money from venture capital, from private equity funds, then they sometimes dictate where your production is going to be, where your facilities are going to be, and in many cases they go to the lowest-cost countries for their production areas," he said.
Although the company isn't pleased with its previous lags in production and hiring, Mr. Murphy said, executives believe the slow pace will have a payoff.
The company has received $19.5 million in incentives and funding from the state.
That includes a $5 million research and development loan from the Ohio Department of Development, a $10 million loan from the Ohio Air Quality Development Authority, a $3.3 million job creation tax credit, and a $701,000 grant to provide training for 50 current and 250 new workers.
The company has not yet used $5 million of its state loans.
Nate Green, director of the development department's strategic business investment division, said the state has backed Willard & Kelsey as part of its support for northwest Ohio's solar industry.
State officials are encouraged by the company's business plan and its financial strength, he said.
"They're an early-stage company, but they were very well capitalized," said Mr. Green, who said companies are vetted by the state before receiving funding. "They had investors, they had equity behind them, so we felt at the time that our investment in them was justified."
The state, he said, has not had any concerns about delays in Willard & Kelsey's production schedule.
State officials have remained in contact with the firm throughout its development process, and the company has begun repayment on its research and development loan.
"We have a good relationship," Mr. Green said. "We understand their business model and their business plan, and where things are going."
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Along with public investments, the company has attracted attention from notable public officials.
U.S. Labor Secretary Hilda Solis toured the plant last week, touting the company's job-creation potential.
Vice President Joe Biden visited in 2009, leading a manufacturing-sector town hall meeting that included U.S. Commerce Secretary Gary Locke, then-Gov. Ted Strickland, and 400 other attendees.
Mr. Murphy said government officials reached out to Willard & Kelsey, and that the company's owners aren't sure how their small business attracted national attention.
The company's commitment to domestic production, as well as the founders' background in the solar industry, may have caught the eye of public officials, he said.
"We're a group of seasoned professionals who have done this before in a bellwether state that is enormously important to the powers that be," he said.
The spotlight hasn't translated into federal funding or incentives for Willard & Kelsey, Mr. Murphy noted.
The company applied for, but did not receive, federal tax credits in 2009 for advanced energy projects. "There are other solar companies that are far better funded in terms of federal programs and stimulus dollars," he said.
If the company is successful in reaching its goals, Mr. Murphy and Mr. Cicak said, it expects to hire 600 to 700 employees in the next two years.
The company hopes to generate 3,000 to 4,000 jobs in the next five to six years, opening a second factory three times the size of its current one.
The company shopped for a second plant site late last year in Tecumseh, Mich., but no deal was announced.
Willard & Kelsey, named for two East Toledo streets near where Mr. Cicak lived as a youth, applied for state assistance in 2008 and proposed a $105 million project.
It said then it expected initially to make 1 million to 1.5 million panels a year.
It purchased the former Delafoil Inc. factory, the cost of which is in addition to the investment in machinery.
Willard & Kelsey's growth projections are achievable, Mr. Murphy said.
But for now, the company will focus on ramping up its Perrysburg facility.
"Nobody wants to be in full production more than we do," Mr. Murphy said. "But we also want to make sure that the quality is there."
Contact Sheena Harrison at: email@example.com or 419-724-6103.