Evergreen Solar to close new plant at Devens
Globe File Photo
Evergreen Solar Inc., which received $58 million in state aid to open a factory in 2008 at the former military base in Devens, announced today it would shut the plant and let go 800 workers by the end of this quarter.The solar-panel plant is a cornerstone of Governor Deval Patrick's efforts to make Massachusetts a hub for the emerging clean-energy industry.
But Evergreen has been struggling in face of weak prices and competition from cheaper operations in China, where the government has offered solar companies generous subsidies to locate there. Evergreen itself has a partnership with a company based in China and previously announced plans to shift some work to the overseas location.
Massachusetts officials noted the state may have the opportunity to recover some of the funds Evergreen received.
The company lost $54 million through the first nine months of 2010, and has, since its founding in 1994, accumulated a total deficit of more than $630 million. Last month, it engineered a reverse stock split to maintain capital requirements for the main Nasdaq stock exchange. Before the split, Evergreen's stock had been trading at about 50 cents.
Evergreen did not say what will happen to the solar-panel assembly work now done at Devens, but the company noted it will continue to operate facilities in China and Michigan.
But it was just a few short years ago the company was a darling in the eyes of the Patrick administration, which offered Evergreen a rich package of grants, land, loans, and other aid - some $76 million in all-to build a new facility at Devens. The company eventually accepted $58.5 million, one of the largest investments Massachusetts has made in a private company.
The aid packages includes a $1-per-year lease for 23 acres at Devens that would otherwise cost $2.3 million.
Massachusetts officials said not all the money is lost. For example, $13 million spent to beef up the infrastructure in Devens could be used to support other businesses that expand at the former base. And some of the other incentives have "claw backs" provisions that allow the state to recapture at least a portion of the money if Evergreen did not meet its original commitment. Evergreen had promised to keep at least 350 jobs there, but the "claw back" agreement is based on a complicated formula that may limit the state's options.
Patrick came under fire during his re-election campaign for giving so much support for Evergreen. But the administration had repeatedly defended the deal, saying Evergreen has created far more than the 350 jobs it promised in exchange for the public money.
And in September, Evergreen Chief Executive Richard Feldt stepped down to take a job at Advanced Electron Beams Inc., a privately held tech company in Wilmington, raising further questions about Evergreen's future.