Solar

Evergreen Solar Has New Wafer Factory Subcontractor in China

Evergreen Solar Inc. has entered into a frame agreement with Jiawei Solar (Wuhan) Co. and the Wuhan Donghu New Technology Development Zone Management Committee that calls for a significant expansion of string ribbon wafer manufacturing in Wuhan, China.

The parties expect to finalize the terms of the manufacturing relationship over the next 90 days, including obtaining project financing and other approvals and permits, and plan to begin production in the second quarter of 2010.
 
Under the agreement, Evergreen Solar will manufacture string ribbon wafers using its quad furnaces at a leased facility being built in Wuhan, China on Jiawei’s campus. Jiawei will process the string ribbon wafers into Evergreen Solar-branded panels on a subcontract basis.

Evergreen will reimburse Jiawei for its cell and panel conversion costs, plus a subcontractor fee. The actual price paid to Jiawei will be negotiated annually. The Wuhan government will provide, or coordinate with other Chinese governmental agencies, various incentives, including guarantees necessary to obtain third-party bank or other financing.

Initial capacity is expected to be approximately 100 MW and the parties intend to expand production capacity to approximately 500 MW by 2012, the timing and extent of which will be determined in 2010.

“We are thrilled about our new relationship with Jiawei and the support that we are receiving from the Wuhan Management Committee,” said Richard Feldt, chairman, CEO and president of Evergreen. “The cost of our 100 MW wafer facility will be between US $40 million and $50 million and we will seek financing for about two thirds of that amount, reducing our portion of initial capital required to approximately $15 million to $20 million.”