Evergreen Solar has filed for bankruptcy as plunging selling prices, scaled-back European PV subsidies and competition from Asia left the US manufacturer with nowhere else to run.
Evergreen sought bankruptcy under US Chapter 11 rules, allowing it to continue operating and giving it time to put itself up for auction in an attempt to realise as much value as possible from the business and its wafer technology assets.
The company owes about $485m, and the bankruptcy filing admits “the assets are expected to be insufficient to satisfy all its obligations to its creditors”, leaving shareholders likely to receive nothing at the end of the process.
The Massachusetts-based company will suspend operations at its plant in Midland, Michigan, and cut its US and European workforce by 65, leaving it with a staff of 85.
The remainder includes 25 people working on wafer development in Wuhan, China, which Evergreen says it hopes to continue operating subject to “market demand” and talks with potential investors locally.
The company has struggled to stay afloat in the face of intense competiton from Asian rivals and declining selling prices for PV-related products. Feed-in tariff reductions in key markets such as Germany and Italy have also taken a toll.
Evergreen made a last-ditch, life-saving attempt to shift its own focus to Asia in January, when it shut its loss-making factory at Devans, Massachusetts with the loss of 800 jobs and unveiled plans to start a new life in China with a 75MW wafer plant.
The move attracted the ire of – and threats of legal action from – its home state, which had given the company at least $43m in aid.
Analysts say Evergreen’s predicament is one of the starkest examples yet of how former stars of the solar sector could be brought low by the combination of falling prices and low-cost manufacturing competition.
Evergreen was a favourite of solar investors in 2007 and 2008. But GTM Research analyst Brett Prior tells Reuters: “It costs $1.10 per watt in China to make a solar panel. That same exact process costs $1.80 here in the US. That’s a 60% difference and that’s too big.”
Evergreen chief executive Michael El-Hillow claims the Chapter 11 filing is the best option left to the company and its creditors.
“The actions we are taking today enable the continued development of an industry standard wafer using Evergreen’s differentiated technology, and thereby provide the lowest cost wafer to the growing solar industry”, says El-Hillow.
“Chapter 11 will provide Evergreen Solar with the ability to maximize returns for our stakeholders through the proposed sale process. Importantly, we expect to continue our technology development without interruption during…the sale process.
“Day-to-day operations will go on as usual as employees carry out their responsibilities and we will continue to pay our suppliers and vendors for goods and services received during this period,” El-Hillow adds.