Solar Cells Info

New 70 Megawatt Devans plant will help fill orders
By Martin Luttrell TELEGRAM & GAZETTE STAFF
Marlboro, July 26, 2007
source: telegram.com
http://www.telegram.com/article/20070726/NEWS/707260389/1002/BUSINESS

As Evergreen Solar Inc. ramps up manufacturing capacity for production of its solar cells, its chief executive officer said the additional orders will put the company on the path to profitability.  Speaking yesterday to about a dozen shareholders at the company’s annual meeting at the Marriott Courtyard hotel, CEO and President Richard M. Feldt said that groundbreaking for a 70-megawatt Devens plant will occur next month, and if work can continue inside the building over the winter, production will begin there next summer.  “In the next year we could break even, and even make money in the following year,” he said.

The company will announce second quarter earnings at 5 p.m. today. Evergreen posted a loss of $6.2 million, or 9 cents per share diluted, on revenue of $14.1 million for the first quarter ended March 31.  The key to profitability is increased capacity and lower production costs, Mr. Feldt said.  Evergreen saw sales grow from $43 million in 2005 to $107 million last year. The company has $1 billion in long term contracts, and will take on more orders as it achieves capacity, he added.

The company’s Marlboro headquarters has a 15-megawatt plant and research and development center. Evergreen also has a 30 percent stake in EverQ, a partnership with Q-Cells AG of Germany and Renewable Energy Corp. ASA of Norway, that opened a second plant last month. EverQ is on track to ship $300 million in product a year, and should do more next year, he said.

Meanwhile, Evergreen is evaluating with a newly-developed “Quad” furnace that produces four ribbons of thin silicon wafers used in solar cells. That will have a cost savings over the company’s Gemini furnaces now in use, which produces two ribbons, he said.  Using its patented “String Ribbon” silicon wafer process, the company currently uses five grams of silicon per watt, less than the industry average, Mr. Feldt said. He aims to lower the silicon used to three grams per watt by 2010.  “We have a real cost advantage,” he said. “We’re real excited about the quad. It’s just about ready for prime time.”

Mr. Feldt said there are no federal tax incentives for installing solar panels except for the two-year Investment Tax Credit program that expires next year. That program, which offers incentives to businesses that invest in solar, fuel cell or geothermal technologies, is being considered by Congress for a 10-year extension. He said California and New Jersey have the best incentive programs, and that Massachusetts does not offer as much in financial incentives.

Germany leads the world in solar production, but that is dependent on government subsidies, he said. Japan’s subsidies have dropped off in recent years, but that country is behind Germany and ahead of the U.S. in solar production, he said.  For alternative energies, the “holy grail” is achieving compatibility with the price of electrical power on the grid. There are many steps between sand – raw silicon – and finished photovoltaic panels, that make solar power twice as expensive as power produced by fossil fuels, hydro or nuclear sources, he said.

Solar panels cost in the range of $3.50 a watt to produce, as an industry average, and cost about $8 a watt to install, on average, counting labor and related equipment, he said.  The company aims to cut its costs in half, he said.

“To do our part we need to cut our costs in half,” Mr. Feldt said. “If we can get it down to $1.50 (per watt) and sell it for $2.50, we can make a profit. Then, this becomes a very big industry without government subsidies.  “That’s the holy grail. We think we have a shot at that in the next few years.”

Evergreen Solar has formed alliances with silicon providers, and with electric utility NStar with the aim of promoting cost-effective solar options for the utility’s customers. Details of the relationship are still being finalized. Mr. Feldt said shipping solar panels is expensive, and that plants should be near customers. That could mean building another plant in the West to serve demand in California, he said.

The company now owns 25 megawatts of capacity and plans to grow that to 600 megawatts by 2012, he said.  “There’s a strong demand for our product,” he said. “… We’re the small guy taking business away from other people.”  Evergreen Solar shares closed down 16 cents, or 1.8 percent, to $8.71 in trading on the Nasdaq Stock Market yesterday.