WBUR

Once-Promising Evergreen Solar Goes Bankrupt

BOSTON — Evergreen Solar Inc., the once-promising company that took tens of millions of dollars in incentives from state government, is bankrupt.

The Marlborough company is filing for Chapter 11 and plans to cut 65 jobs in Europe and Massachusetts, on top of the 800 it eliminated earlier this year by closing its plant in Devens.

The bankruptcy filing could complicate the state’s efforts to recover some of the money it gave Evergreen.

WBUR’s business and technology reporter Curt Nickisch has been following the story and joined Morning Edition Tuesday.

Deborah Becker: Why is Evergreen Solar filing for bankruptcy?

Curt Nickisch: The company owes about a half-billion dollars and operations are essentially on hold right now. Evergreen is selling only solar panels that it has in stock, it’s not making any new ones currently. So the company is in deep trouble, and reorganization through bankruptcy seems to be the only way to survive anymore.

One of its major creditors is the state of Massachusetts. Will the state be able to get back what it says it’s owed from Evergreen?

A spokesperson for the state’s economic development office says yes. And of course what’s at stake here is that wonderful and regrettable word “clawbacks.” Evergreen Solar got tax incentives for building a manufacturing plant to create jobs, and since it didn’t create and keep those jobs, it has to give money back. State officials say they were expecting bankruptcy, that they’re going to move aggressively, and they say it will not prevent them from clawing back money.

Where did Evergreen Solar go wrong?

One thing this bankruptcy filing should erase once and for all is this lingering notion that somehow Evergreen’s managers were out to fleece state taxpayers. The fact is they built a factory that got crushed by the law of supply and demand and that really pushed them into bankruptcy.

I spoke with one of the workers who lost his job at Evergreen this year, Andrew Koenigsberg, and he said when solar panel prices crashed worldwide, basically Evergreen was losing money on every panel it made.

Could they have been better managed? From my perspective and from the perspective of a lot of people I knew who worked there, yes they could’ve been better managed. However…I don’t think it would’ve changed the outcome.

If Evergreen can emerge from bankruptcy, is there a chance that it might succeed?

If it does — and it will be tough — it will be because of what excited so many people about the company in the first place: the technology it has to make silicon wafers cheaper. Evergreen Solar can still do that.

Looking back, maybe the biggest mistake it made was trying to build and market and sell solar panels that were made from those cheaper wafers. It’s like if you’re able to build a computer screen cheaper and you decide to go ahead and build the whole computer. If someone comes along and decides to make that computer cheaper, even though you can make the screen cheaper you can’t compete. And that may have been Evergreen’s biggest mistake.

What does the Evergreen Solar story say about the climate for manufacturing and the climate for green business in Massachusetts?

It’s definitely sad to look at the 130 or so people left at Evergreen and know that 65 are now losing their jobs. If Evergreen survives, it may be only as a small company based in Massachusetts with a proprietary technology to make wafers that it will produce at a highly automated and subsidized factory in China. This is so different from the days of Digital Equipment Corp. and Wang Laboratories, when not only great computers were imagined and designed in Massachusetts, we had thousands of people here making them, too.

I think Evergreen shows how different it is now for Massachusetts to both come up with the next big thing and build it.

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  • X-Ray

    But its a matter of faith; solar and all renewables is the way to go, and as the President says, “Good Green jobs, made in America.” That seems to be delusional. The Chinese are eating our lunch, they are doing our production from computers to carpets and cookware, from televisions to toasters. Those are exported jobs. Unless and until we recognize this as the root cause of our economic malaise, we the U.S. economy will not recover.

  • Jasoturner

    Solar remains a boutique technology that is only viable in a strong economy where wealthy green patrons will splurge on it.  The times have changed.

  • Andrew Koenigsberg

    Solar does not have the advantages of subsidies that ethanol has, the tax breaks for oil companies, the bypass that coal gets for the environmental damage it causes.  Before it closed its factory, Evergreen was hit with a tarriff because it imported the panel frames from China.  OK, so aluminum manufacturers get help from Chinese competition – but solar does not – it gets hammered by low cost chinese panels made in factories with no environmental regulation, workers who make a 20th of what we make per hour and a government determined to corner the market by throwing huge subsidies at it.   The tarriff imposed on Evergreen was akin to being in a deep hole and then someone throwing you a shovel.  In this country, the basic fact is that solar does not have the influence in DC that “traditional” companies have.  Evergreen still may not have made it but the cards were always stacked against it and other green tech from the get go because of our government’s shortsightedness.

    • Anonymous

      No successful (profitable) company in the history of capitalism was ever subsidized heavily at the outset by the government. The money would have been better spent on research in non-profits FIRST to take a risk on solar ever being economically viable.

      This Administration has bought the urban legend that solar is viable, and the evil oil companies have sabotaged it. So let’s pump stimulus money into something destined to fail in the name of the planet.

      Your oil company subsidy argument is moot. The oil companies started by private risk over 120 years ago.

      Ethanol was another government getting involved on false science from the greenies.

  • Anonymous

    It is a sad thing to see the destruction of careers.  I lived this horror when thousands of very talented technical wage earners, people, were terminated in the nuclear power, and coal fuel power plant industries.   Many were my friends.   But our economy survives on a cost-quality Darwinism, and solar electricity has a long way to go, to become competitive.

    There are three barriers to success.  The efficiency of solar energy to electricity must increase by a factor of five ( I am not current on Evergreens technology).  The cost of fabrication and installation must drop by some whole multiple.  And solar must not seek government mandates and subsidies in order to survive in the market.  All government sponsored monopolies will go under the knife if America is to reduce its debt, and reduce the cost of energy.

    There is a niche market for this technology, in remote, low standard of living locations, e.g. remote China, where the marginal value of interruptable power is large, where juice is expected to be instantly switched off.

    The only value of this expensive technology, in advance nations, is linked to the climate change argument, in which carbon combustion, to day, is feared and poverty is an acceptable option.  After much study, I would risk my grand kids lives on coal combustion.  The threat is neither proven, or scoped.

  • silias Dogood

    It is too bad that in our infinite wisdom as a culture and a country, we tend to miss some very large mistakes/loopholes in our quest to subsidize jobs and manufacturing and green technology.   Evergreen can be saved by simply making all incentives, ie. public grants incentives for creating jobs directly tied to US companies.  So If you make solar panels in the US your panel qualifies for incentives.  If they are made overseas then they do not.  Simple as that.  Overnight there will be tons of jobs.  Companies taking incentives will prosper and return positive on your public investment.   Amazingly simple and yet everyone will argue against it…

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