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| Table of Contents |
| Intro and Overview |
| Introduction |
| Business Overview |
| Trends and Forces |
| Key Trends and Forces |
| Competition |
| Competition and Market Share |
Within the solar industry, Evergreen Solar competes on the basis of cost - minimizing the cost of buying a solar system by lowering manufacturing costs, and minimizing the cost of running a system by increasing the conversion efficiency of its cells. On both fronts the company doesn't compare too well. In Q4 2008, it had a manufacturing cost per watt of $3.5,[10]far behind competitor First Solar, with costs of 98 cents per watt.[11] Also in Q4 2008, Evergreen's cells had a conversion efficiency of approximately 15%,[12] lower than many of its competitors, like 21.4% for Sanyo in Q1 2009,[13] and the average producer of single crystal cells in 2007, with an efficiency of 17%.[14] With a stated goal of reaching $2/watt by 2009[10] and 18% efficiency and $1.50/watt by 2010,[1] however, the company will stack up well if it can meet those goals.[1] The solar sector is becoming more and more competitive; among ESLR's competition are such powerhouses as SunPower, SunTech, BP Solar, Sharp, Kyocera, and Q-Cells.
[edit] Business Overview
Evergreen Solar is a vertically integrated company that operates through four stages of the solar power industry. The company produces multicrystalline ribbon silicon wafers from refined silicon. Evergreen's string ribbon PV technology lets the company form photovoltaic wafers with less silicon than the mono- and multicrystalline wafers made by other solar manufacturers - almost making them silicon versions of thin film. These wafers are then made into photovoltaic (PV) cells, that turn light energy (usually from the sun) into electricity. Evergreen's PV cells are put together into modules, which generate up to 190 watts of power. [15]. Finally, Evergreen takes these modules and wires them together into solar power systems, which can generate thousands of watts of electricity. The company sells to installers in Europe and North America.
| 2005 | 2006 | 2007 | 2008 | |
|---|---|---|---|---|
| Total Revenue | $43,627.00 | $102,252.00 | $69,866.00 | $111,959.00 |
| Product Revenues | $43,627.00 | $102,252.00 | $58,334.00 | $95,245.00 |
| Royalty and Fee Revenues | $0 | $0 | $11,532.00 | $16,714.00 |
| Net Income (loss) | $(17,316.00) | $(26,669.00) | $(16,602.00) | $(84,935.00) |
Revenue and expenses decreased from 2006 to 2007, because in 2007, Evergreen cut its share in Sovello from two-thirds to one-third.[17] In the process, Evergreen stopped using Sovello's financials in its own accounting. From 2007 to 2008 product sales increased by 63%, as new production from the companies Devens facility boosted sales by 61%.[18] At the same time, costs in setting up the new facility brought down net income from -$16 million, to -$85 million.[16]
[edit] Sovello
Sovello is a German solar company that produces 30 megawatts of power per year and has a stated goal of increasing production to 300 megawatts by 2010.[19] In 2007 Evergreen reduced its ownership from two thirds to one third. Per accounting rules it is no longer consolidated on Evergreen's financial statements. In October 2007 Evergreen announced a plan for Sovello's IPO. In December of 2008 Evergreen re-affirmed it's intention for Sovello to have an IPO, at which point the company would generate much needed capital but lose primary access to the fast-growing German solar market.[19]
[edit] Evergreen Has Been Using Equity To Finance Expansion
Evergreen has lost 33% of its equity to stay competitive in 2007 and 2008. In order to lower costs the company has to create economies of scale by enlarging its manufacturing capacity. To raise and save money in order to do that, Evergreen has done two things. First, the company paid for its silicon contract with DC Chemical with a 13% equity stake in April of 2007.[20] Second, the company lent Lehman Brothers 30.9 million shares in order to raise capital.[21] When Lehman went bankrupt, it did not return the shares as it was supposed to, and so is facing legal action. If Lehman were to return the shares, Evergreen would have essentially completed a free buyback of 30.9 million shares. In absence of that, Evergreen's shares have been diluted approximately 20%, in addition to the 13% it gave to DC. These are not the first times the company has used equity to raise capital, and given its projected continued operating losses, will likely not be its last.[22] As long as Evergreen gets something of equal value in return that doesn't matter, but with both DC Chemical and Lehman the company lost out. The company's silicon contract with DC Chemical has lost value, as the price of silicon fell in late 2008 and early 2009, and Lehman went bankrupt before its transaction with Evergreen could be completed. (Read More about Evergreen Solar's Key Trends and Forces...)
[edit] References
- ↑ 1.0 1.1 1.2
- ↑ Solar Dave - How has Solar Efficiency Changed Over the Years?
- ↑ ESLR 2008 10-K, Item 6, Page 39
- ↑
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- ↑ 10.0 10.1 ESLR 2008 10-K, F-8
- ↑ Pv-tech - First Solar first to US$1 per watt manufacturing cost
- ↑ Evergreen Solar - FAQ
- ↑ TechOn - [JSAP Sanyo Makes HIT Solar Cell Thinner While Keeping High Efficiency]
- ↑ [http://www.eia.doe.gov/cneaf/solar.renewables/page/solarreport/table3_8.html Energy Information Administration - Average Energy Conversion Efficiency of Photovoltaic Cells and Modules]
- ↑ http://stocks.us.reuters.com/stocks/fullDescription.asp?rpc=66&symbol=ESLR.O
- ↑ 16.0 16.1 ESLR 2008 10-K, Item 6, Page 33
- ↑ Boston Business Journal - Evergreen Solar plans IPO for EverQ
- ↑ ESLR, 2008 10-K, Item 6, Page 38
- ↑ 19.0 19.1 PV-Tech - Hello Sovello, goodbye EverQ: Solar company changes name, goes indie, delays IPO
- ↑ ESLR, 2009 10-K, Item 1, Page 27
- ↑ Boston Globe - Lehman failure dogs Evergreen Solar
- ↑ The Stock Masters - In Your Face with Evergreen Solar (ESLR)
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