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Evergreen Solar expands job-cut figure

But company also plans to invest in Marlborough site

By Todd Wallack
Globe Staff / January 15, 2011

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Evergreen Solar Inc., which revealed on Tuesday that it will close its solar panel plant in Devens, now says it will cut more jobs than previously disclosed. However, the company also plans to invest millions of dollars in its existing research and development center in Marlborough, and remains committed to Massachusetts.

In its original statement, the solar energy company said it planned to shut the facility by the end of March and eliminate 800 jobs in the state.

Evergreen spokesman Michael W. McCarthy later said the 800 jobs will all come from the Devens plant, and the company will also cut an undetermined number of workers at its corporate headquarters in Marlborough.

Company executives said they will have to close the $430 million manufacturing plant because it can not compete with cheaper manufacturing in China, including its own plant there.

Evergreen won $58 million in state incentives to build the Devens plant in 2008, but has not received all of that money and may have to repay some of the remaining amount because it is closing the plant.

The company vowed, however, to retain its corporate headquarters and research center in Marlborough, saying Massachusetts remains the ideal location to develop cutting-edge solar power technology.

The company was founded in 1994 using technology invented by a professor at the Massachusetts Institute of Technology in Cambridge.

“Despite the challenges of commercial manufacturing, the US continues to be exceptionally strong and the global leader in new technology,’’ said McCarthy, Evergreen’s director of investor relations and government affairs. “The US has the best universities in the world, hands down, and there is the highest concentration of those in Massachusetts.’’

McCarthy said Thursday that Evergreen does not plan to lay off any of its research staff. The company has more than 100 employees in Marlborough, including more than 50 who work in research and development.

“R&D will not be affected at all by the head count reduction,’’ McCarthy said.

The company also plans to invest money in new equipment in Marlborough, McCarthy added, including 10 new furnaces to help produce its next generation of solar wafers — shiny strips of silicon that are used in solar cells, the components in solar panels that convert sunlight into electricity. The furnaces alone will probably cost $1.2 million to $1.5 million.

Evergreen makes silicon wafers for its own solar panels, but said it is developing a new line of “wide wafers’’ in a standard industry size that can be sold to other solar panel manufacturers.

The company said it believes its wafers have an edge over rivals because it has developed “string ribbon’’ technology that allows it to use less silicon than other manufacturers, reducing the production costs.

But the value of polysilicon has fallen from a peak of $400 in 2008 to roughly $70 per kilogram today, making that price difference less advantageous, according to Christine Hersey, a financial analyst with Wedbush Morgan Securities in Los Angeles who follows the industry.

Hersey noted that Evergreen is weighed down by debt from its past investments in making solar panels, and will face a raft of rivals who are further along in producing standard-sized wafers.

“I think it’s going to be very challenging for them,’’ Hersey said.

Evergreen has lost more than $685 million since its founding in 1994, including $54 million through the first nine months of 2010, and plans to take a $340 million in charge to write off the value of Devens.

Investors remain skeptical about the firm’s future. The company’s stock closed yesterday at $3.07, down from a peak of $113.10 in 2007 (after adjusting for stock splits).

Meanwhile, questions remain about what will happen to the Devens facility when Evergreen shuts down the plant.

McCarthy said Evergreen has not determined what to do with the 450,000-square-foot building.

The company owns the building and has a 30-year lease for the land underneath it.

“It’s pretty wide open,’’ McCarthy said. “We will be looking at the best value for the company.’’

Separately, Evergreen reported this week that it agreed to pay a $50,000 “sign-on bonus’’ and a $295,000 per year salary to its new chief financial officer, Donald W. Reilly, who joined the company Jan. 10.

Todd Wallack can be reached at twallack@globe.com.