Evergreen Solar Plans to Move U.S. Panel Production to China

Evergreen Solar (NSDQ: ESLR) plans to stop producing panels at its factory in Devens, Mass., and shift that work to China, the company said this week.

The Marlboro, Mass.-based company has been producing silicon wafers and cells, and assembling them into panels at the Devens factory.

But running the factory proves expensive, especially when its operation in China will be able to do it for less, the company said.

Evergreen decided to shift some of its manufacturing to China earlier this year. It is contracting with Jiawei Solar to produce cells and turn them into panels.

Evergreen will manufacture the wafers for the cell production in China, and do so in a leased factory being built by Jiawei, the company said when it announced the final agreement with Jiawei. The companies plan to build 100 megawatts of annual production capacities initially. Manufacturing is set to start in spring 2010.

Evergreen plans to shift panel production from Devens to China in mid-2010.

Before inking the deal with Jiawei, Evergreen had considered building its own factory to make wafers, cells and panels in China. But lining up financing for the factory proved difficult. Outsourcing some of the manufacturing would cut costs significantly, the company said.

The company shipped 31.3 megawatts of solar panels from Devens in the third quarter of this year, a 35 percent boost from the second quarter, Evergreen executives said Wednesday.

The company said it could restart panel production at Devens if demand in the United States picks up.

Evergreen's shares rose 9 percent to close at $1.55 per share Thursday.