Evergreen Solar spending up to $30M to close pilot plant

Marlboro, Mass.-based Evergreen Solar (Nasdaq: ESLR) could spend up to $30.4 million to close its pilot facility in Marlboro, the company reported late Monday.

Shares of the company were down 3.61 percent in mid-afternoon trading today to $3.47. Shares have ranged from $1.89 to $18.09 in the past 52 weeks.

Evergreen ceased production on Dec. 31 at the facility, which has a production capacity of 17 megawatts. The company plans to continue to use it for research and development.

Much of Evergreen's expenses related to closing the factory are going to be recognized in the fourth quarter 2008. Those include $25 million to write off equipment and building improvements, and $3 million to $5 million in moving costs.

The closure doesn't come as a surprise, as Evergreen previously said it operated at a higher cost than the 160 MW capacity Devens, Mass., facility. Shifting production there could reduce overall cash requirements, according to company officials.

In the fourth quarter, Evergreen reported shipments of 8.5 MW from the Devens facility and 3.7 MW from the Marlboro facility.

The company has said it plans to produce panels for less than $1 a watt by 2014. The per-watt cost at the Devens facility is about $2.65 today, according to a report from analysts at Thomas Weisel Partners.

Based on the cost to close the pilot plant, Thomas Weisel Partners' report lowered revenue estimates for 2008 from $114.1 million to $113.1 million, and raised the 2009 estimate from $360.5 million to $372.5 million.

Evergreen plans to raise about $400 million to build out a new 400 to 500 MW facility in Asia and use 12,500 metric tons of polysilicon it has secured through 2012. The company said it could delay construction until June 2009 if needed.

Evergreen was burned by project financing to complete the Devens facility. The company raised part of the $375 million by lending 30.9 million of its shares to Lehman Brothers, which was sold to Barclays. Barclays is now claiming ownership of 12.2 millions shares, while the rest are believed to have been sold (see Evergreen calls foul in Lehman bankruptcy).

Thomas Weisel projected that production from the Devens facility could push the company to profitability in 2009.

The company signed a string of new contracts last year, including two contracts in June that brought the company's contractual backlog to more than $1.7 billion (see Evergreen signs $600M in new contracts).

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