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Evergreen Solar to shift some operations to China

By Erin Ailworth
Globe Staff / November 4, 2009

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Little more than a year after cutting the ribbon at a new factory in Devens built with more than $58 million in state aid, Evergreen Solar today said it will shift its assembly of solar panels from there to China.

About half of the 577 full-time and 230 contract employees at the Devens factory are involved in putting the panels together. However Evergreen declined to say about how many of those jobs would disappear with the scheduled transfer next year to China, where it is expanding because of lower costs.

Evergreen uses the Devens facility to make the silicon wafers and cells -- which are wafers with components added to them -- that are used in the production of solar energy. It also assembles those parts into the solar panels that increasingly adorn rooftops. The wafers and cells will still be manufactured at Devens, but the final assembly of the solar panels will move to China.

In a statement tonight, Evergreen said it "remains committed to the investment it has made in Massachusetts. Marlboro is home to our company headquarters and R&D facilities. Devens will continue to be our U.S. manufacturing location for wafer and cell production and our staffing plans will remain well within the employment commitment we made to the state when we first announced our plans to build the Devens facility."

In exchange for receiving $58.6 million in grants, loans, land, tax incentives and other aid to build in Massachusetts, Evergreen pledged that it would add 350 new jobs, a goal that it has, to date, far surpassed. However, the company disclosed in a financial filing today that it would write off $40 million worth of equipment at Devens because of the production shift to China.

The company has been a poster child of the Patrick administration's efforts to develop a "green energy" industry cluster in Massachusetts. But it has been struggling financially because of increased competition from overseas producers and rapidly falling prices for solar products. It recently persuaded the state to lend it another $5 million to cover equipment purchases, though the state has not yet released the funds.

Massachusetts's top environmental official expressed dismay at Evergreen's decision to stop assembling the panels in Devens.

"Governor Patrick and I are disappointed by Evergreen Solar's decision to begin moving the final panel assembly component of their business to China," said Ian Bowles, secretary of the state's Executive Office of Energy and Environmental Affairs. "In just two short years, Evergreen Solar has become a significant employer in Massachusetts and we will work hard to make sure the company protects the maximum number of jobs in our state."

The company disclosed the China relocation in the filing of its earnings for the third-quarter of 2009. Through the first nine months of this year Evergreen lost $167 million cq, compared to $33.6 million for the same period last year. The company's stock closed at $1.42 today, down 6 cents.

In explaining the move to China, Evergreen chief executive Richard M. Feldt said in the company's filing today that prices for assembled panels have fallen more than 30 percent in just the last year, making it "very difficult for manufacturers located in high cost regions to remain price competitive." Earlier this year, Evergreen executives unveiled plans to expand in Wuhan, China, where they said they expected to be able to make solar panels for about $1.50 a watt -- far cheaper than they could at Devens.

Feldt did say that Evergreen could increase production of wafers and cells at Devens "if market demand warrants."

In an interview with the Globe last month chief financial officer Michael El-Hillow said he expected some jobs at Devens to be eliminated with a move to China. However, he added those losses would likely be somewhat offset with a boost in production of wafers and cells.

Erin Ailworth can be reached at eailworth@globe.com. Globe staff writer Todd Wallack contributed to this report.