With prices of panels rapidly declining, it is becoming harder for many firms to make a profit in solar power.
After months of unsuccessful attempts to save the business, Massachusetts-based Evergreen Solar announced it was filing for bankruptcy on Monday. The company will be broken up into smaller units and will continue to manufacture its signature String Ribbon solar wafers, according to an Evergreen Solar statement. It is expected that financial firm ES Purchaser will buy up most of the remaining assets.
By 2009, the company moved much of its manufacturing to China for economic reasons but this January, Evergreen Solar closed its Devens, Massachusetts factory and laid off 800 workers because it was continuing to lose money.
“We have consistently stated during quarterly conference calls throughout 2010 that we would continue to manufacture in Devens as long as it was economically feasible,” said Evergreen CEO Michael El-Hillow in a January statement.
Chinese-based SunPower also repeated quarterly losses as it struggles to keep up revenue despite dropping panel prices. Read the story: SunPower Builds Cash Pile As Losses Mount.
By the end of March, the company reported quarterly revenue losses of $35.3 million, a 60.4% decline from the previous quarter, a product of rapidly declining sale prices for individual modules. In its end-2010 financial report, Evergreen Solar said the average selling price per panel decreased 5.9% to $1.90 during the final quarter of that year.
By February, morale was low at the company. A February 1 analysis from research firm Earnings Expert LLC titled “Any news is bad news for Evergreen shareholders,” said stock prices were down 55% since a recapitalization announcement at the end of 2010.
The research note asked: “Third time is a charm? Stock price up?”
But no charm appeared and the company experienced continued revenue losses. Evergreen will not release a 2011 second quarter report, according to a spokesperson.
Evergreen’s wafers were marketed as being cheaper than other wafers because they needed less polysilicon than other models. When the company started faltering several years ago, it transitioned from manufacturing whole panels to making just the wafers.
The company’s President and CEO, Michael El-Hillow said he hopes Evergreen can continue operating and providing the wafers for the solar industry.
“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 said in a statement.
Photo Caption: Silicon blocks for the production of Solar cells are seen September 4, 2006 at Solar World AG in Saxony’s Solar Valley in Freiberg, Saxony, Germany.