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.