Evergreen Solar Continues to Shine

Evergreen Solar (Nasdaq: ESLR) is continuing to make progress in the marketplace as indicated in this statement from their quarterly report:

“Through the EverQ partnership, we have captured the initial promise of our String Ribbon technology and demonstrated that it is exportable, scalable and profitable – at 30MW,” Richard M. Feldt, President and Chief Executive Officer said. “As a result of our accomplishments to date, we have created a clear path to grow the EverQ business to roughly 10 times its current size, generating 300MW of solar production by 2010. Based on our technological capabilities and additional growth opportunities, we believe Evergreen Solar is strongly positioned to be in the forefront of helping the solar industry achieve economic parity with retail grid electricity.”

In the String Ribbon technique, high temperature strings are pulled vertically through a shallow silicon melt, and the molten silicon spans and freezes between the strings (diagram left). The process is continuous: long strings are unwound from spools; the melt is replenished; and the silicon ribbon is cut to length for further processing, without interrupting growth. This advantage in material efficiency means String Ribbon yields over twice as many solar cells per pound of silicon as conventional methods. Additionally, the resulting distinctive shape of the solar cell allows for a high packing density. Productivity has been continually increased by increasing the width of the strings, the th ickness of the strings, the speed of pulling the strings and the number of strings pulled from a single furnace. More details about their technology can be found in this previous post.

Accomplishments that they listed in the report included.

• Product revenues increased 227 percent to $36.2 million from $11.1 million in the third quarter of 2005, with sales of product manufactured at the first EverQ factory – EverQ-1 in Germany contributing approximately $25.4 million of the total revenue and over 22 percent gross margin, including 31 percent gross margin for the month of September.
• EverQ-1 ramped to full production capacity in the third quarter. As a result, EverQ (not Evergreen as a whole) achieved profitability for the third quarter of approximately $2.3 million.
• EverQ’s second factory – EverQ-2 – broke ground in the quarter and is on track to begin production in the second quarter of 2007, and should reach full capacity by the end of 2007.
• Net loss attributable to common stockholders for the third quarter of 2006 was $5.6 million, or $0.08 per share. This figure includes the write-off of manufacturing equipment obsoleted by the implementation of new technology at Marlboro amounting to approximately $550,000. This compares with a net loss of $4.6 million, or $0.07 per share, for the third quarter of 2005 and a net loss of $7.5 million, or $0.11 per share, for the second quarter of 2006.
• For 2007, Evergreen Solar expects revenue from EverQ-1 to be in a range of $100 to $125 million (assuming current exchange rates) as it completes the transition to the thin ribbon platform by the first quarter of 2007 and plans to add approximately 5 MW of incremental capacity at that plant by the second quarter of 2007.
• The Company anticipates that EverQ-2 will commence volume shipments during the second quarter of 2007, and should reach full manufacturing capacity by the fourth quarter of 2007. EverQ-2 is expected to generate revenue in the range of $60 to $75 million (assuming current exchange rates) in 2007.
• Combined EverQ and Evergreen Solar world-wide product revenue in 2007 are expected be in the range of approximately $200 to $250 million.
• Feldt also said “We completed the ramp to full production at the first EverQ factory one quarter ahead of schedule – progressing from groundbreaking to full capacity and profitability in 15 months."
• "We finalized the long-term polysilicon supply, license and technology transfer agreements related to EverQ’s partnership, subject to the receipt of regulatory approval."
• “In Marlboro, we made substantial progress on our Quad Ribbon furnace development to the point where we believe it is likely that the next EverQ expansion EverQ-3 will be designed around that new four-ribbon furnace."
• "We successfully introduced in Marlboro a new cell fabrication process that increases cell efficiency to just over 14.5 percent, which brings us very close to the industry median.
• “In the fourth quarter, we will be converting the entire EverQ factory to thin wafer production. We believe the combination of this conversion with other manufacturing enhancements will enable us to improve our silicon productivity to less than six grams per watt by year end.
• “The success of EverQ has substantially enhanced our expansion possibilities. With EverQ, we have demonstrated the exportability, scalability and commercial possibilities of String Ribbon. We expect to significantly expand Evergreen Solar beyond our Marlboro facility and the EverQ partnership. We are targeting growing our company by at least an additional 150MW over the next three to four years, with factories that are on par operationally and financially with EverQ. We are evaluating options for expansion that include other potential partnership arrangements as well as go-it-alone strategies.

Evergreen is headquarted in Marlboro, MA and has 15 MW of pilot production at that site, which they continue to upgrade to incorporated their latest improvements.  Their EverQ factory in Thalheim, Germany, which in 2007 is expected to be a one-third owned unconsolidated subsidiary of Evergreen Solar, Q-Cells AG (Germany), and Renewable Energy Corporation ASA (Norway). Q-Cells is the world's largest independent manufacturer of crystalline silicon solar cells. Renewable Energy Corporation ASA (REC) is the world's largest manufacturer of solar-grade silicon and multicrystalline wafers.

Under the terms of a long-term supply agreement, Renewable Energy Corporation of Norway (OSEAX: REC.OL) will supply EverQ with a total of 7,400 metric tons of granular polysilicon over seven years beginning in 2008. Shipments of approximately 400 metric tons are expected to begin in the second half of 2008 and increase to 1,200 metric tons annually by 2010, continuing through 2014. This is in addition to the 190 metric tons REC is supplying EverQ annually under an existing arrangement.

Resources:

Evergreen Solar Announces Third-Quarter 2006 Results, Press release, October 24, 2006
Evergreen Solar, Marlboro, MA USA

Comments

[Mike @ HCVN]

If you were getting curious, 1 metric ton = 10^6 grams. So that 7400 tons of silicon is for ~1.21 giga-watts of solar panels. Here comes the future!

Mike

[J.C., Sr.]

Can I buy a solar kit at Home Depot yet?