Evergreen seeks Chapter 11 protection; more manufacturers to follow17. August 2011 | Top News, Markets & Trends, Industry & Suppliers | By: Charles W. Thurston
Evergreen Solar has filed for voluntary bankruptcy and has announced plant closures. Analysts warn more companies, like SolarWorld and Schott Solar, are at risk.
Evergreen was once the darling of the Massachusetts high tech startups, winning some $58 million worth of loans and other incentives from the state government. But when the company filed a Chapter 13 Bankruptcy proceeding on August 15, creditors were left holding the bag for some $485 million.
Last year, Evergreen closed its Devens, Mass. plant and laid off 800 workers. Now the company will close its offices in Marlboro, Mass, close its plant in Midland, Michigan, and cut jobs in Europe. The company’s Wuhan, Hubei plant will remain open during debt negotiations, at least.
The trouble was that Evergreen’s per-watt manufacturing cost was $1.88 in the fourth quarter of 2010, while Chinese manufacturers were producing for $1.10 a watt.
"Part of the problem was the size of the operation: Evergreen produced 160 MW in 2010, while SolarWorld produced 219 MW, so their production cost is cheaper - probably about $1.50 per watt - because they are bigger," Brett Prior, a senior analyst at GTM Research told pv magazine.
"So who’s next? There will be more companies shuttering production and maybe going out of business. Solon Corp. is closing its Tucson, Arizona plant and will lay off 65 workers. I would also be concerned about SolarWorld, and Schott Solar could be at risk," Prior suggests.
Another analyst predicted that Ascent Solar and Hoku could be headed for bankruptcy court as well.
"Basically it does not bode well for solar manufacturers in industrialized countries with a higher cost basis, which can include higher environmental compliance costs, higher electricity costs, higher material costs, and a higher cost of borrowing money to build these facilities," explains Prior.
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