Evergreen Solar Files For Bankruptcy, Looks to Sell Core Technology

Ucilia Wang, Contributing Editor
August 15, 2011 | 6 Comments

Evergreen Solar has been like a patient with a chronic illness. But now, it's needing emergency care: the company said Monday it's filing for bankruptcy and looking to sell its core technology.

The Massachusetts company is filing for Chapter 11 so that it can carry out a re-organization plan and perhaps stay in business somehow. Evergreen said it also will lay off about 65 people and stop production at its Michigan factory.

Evergreen’s shares tumbled 57 percent to close at the dismal $0.18 per share on Monday.

The company’s woes have been well documented and involved both its ability to make and sell its silicon solar panels more cheaply. Investors began losing confidence in Evergreen a few years back, when the company was posting mounting losses. In 2009, the company announced plans to expand production by setting up a manufacturing base in China instead of the United States, as it had previously hoped to do. It also dialed back production in the United States as well.

While Evergreen worked on its new manufacturing strategy, many of its peers, particularly those in China, were able to line up financing and build new factories. Silicon solar panel prices have fallen by more than 50 percent in the past two years, and the pressure to cut costs continues to be intense this year as supply outstrips demand.

To stay competitive takes a lot of money these days. SunPower turned to French oil giant Total, selling a 60 percent stake in its company to Total. Just this morning, Ascent Solar Technologies announced it had lined up a Chinese conglomerate, TFG Radiant Group, which has agreed to buy a 20 percent stake in Ascent. The deal will also allow TFG to increase its stake to 35 percent and commits TFG to spend about $165 million to build a factory in China to make solar panels using Ascent’s copper-indium-gallium-selenide (CIGS) thin film technology.

Setting up production in China would seem to make sense not just from a cost-cutting perspective. China seemed poised to be a big solar energy end-market. But that prospect hasn’t panned out as nicely as some companies have anticipated. European countries such as Germany and Italy continue to dominate even as they cut spending that subsidizes solar installations. The United States has become the go-to market for companies such as First Solar and SunPower as they shift their strategies to depend less on Europe for the bulk of their sales.

Evergreen is working with key shareholders on a restructuring plan as part of its bankruptcy proceeding and planning to sell some assets, including its String Ribbon wafer technology. Evergreen also is talking with its Chinese investors to figure out what to do with its operations in China.

The company said it expects to continue to operate and work on technology development while undergoing the Chapter 11 process.

6 Comments

Steven Reeves
August 19, 2011

Evergreen had issues because they stayed with building a commodity product vs differentiating themselves with something better, easier, cheaper. The sad truth about Evergreen Solar is that their technology is just not good enough anymore. Being a sub-contractor for ASE Americas back in the 90's, I helped build much of the equipment and saw the technology first hand - and it's limits. Evergreen Solar (just down the road from ASE) had the same technology - EFG (Edge-Defined Film Growth). EFG will always have lower efficiencies and other cell-related technical issues. Evergreen also made some poor component design choices and had some well known quality issues.

SRLAND-CAREFARM - ZEP is going through growth pains, and can not work with other companies until they get larger. Plus the ZEP product is just a license, they do not make the frame for module manufacturers to use. This is great for investors in ZEP, but just adds more cents to every module made. Time for better ideas to emerge and that has always been an American strength.

Lawrence Carroll
August 17, 2011

For me I\it is sad to see Evergreen go under. I liked the company, and even made some good profits on it years ago (buying a lot of stock when it was still an emerging company and slowly unloading it as its price rose). Now I am going to loose some of that profit (not enough to hurt too much, though). But what really is sad is seeing a good firm with a solid (though hardly radically innovative) product experience such hard times.

But . . . that is the so-called "capitalist" (USA) world we live in - you have to have either tremendous defense contracts (or the like) in your portfolio (booo!) OR you have to have such an ingenious, cheap, and/or interesting technology as to be irresitable to investors if you want to survive over the long haul.

If we were a lot less military-industrial in our overall outlook, and were instead focused farless on a fear-based, "defense" economy, well -- the sky would be the limit, and everyone's standard of living would improve expoentially (and in so many different ways). True capitalism, or "natural capitalism" as an alternative energy and lifestyle writer dubbed it years ago, would be the norm, and not corporate or state capitalism.

Oh well, maybe in another hundred years?

Sam Harriman
August 17, 2011

@doggydogworld,
I couldn't have said it better. I'm still feeling jilted by their offshore move. They had my business over other US-based manufacturers when they were providing family-wage jobs down in Mass. Since they left, I like SolarWorld—not just for their products, which are high-quality, but primarily because they employ over 1,000 people in my local community.

@rich-barbarics-33637,
hmm, right. marketing strategies...

@SRLAND-CAREFARM,
that "... high freight cost ..." sounds like a bear.

DoggyDog World
August 17, 2011

Evergreen's claim to fame was reduced silicon usage. They had their day when silicon prices went through the roof, but when prices returned to earth they no longer had any advantage. Most innovations fail, but in the overall scheme of things the failures are every bit as important as the successes.

Rich Barbarics
August 17, 2011

Unfortunately solar PV is a commodity and what is/was really needed is some basic marketing strategies beyond product.

Stuart Smith
August 16, 2011

Sounds like a race to the bottom. Even with market price levels closing in on a dollar per watt, the balance of the system cost are still too high to pencil out timely pay back. FIT could help some with utility greed. Inverters take an unreasonably huge chunk of balance cost. ZEP helps with racking cost some. Retailers, installers and high freight cost top the cake with PV. Until the get rich quick folks are checked, we will have a problem.

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Ucilia Wang

Ucilia Wang is a California-based freelance journalist who writes about renewable energy. She previously was the associate editor at Greentech Media and a staff writer covering the semiconductor industry at Red Herring. In addition to Renewable...