Apr 30 2009
Evergreen Solar, Inc. (NasdaqGM: ESLR), a manufacturer of String Ribbon™ solar power products with its proprietary, low-cost silicon wafer technology, today announced it has entered into a frame agreement with Jiawei Solar (Wuhan) Co. and the Wuhan Donghu New Technology Development Zone Management Committee which calls for a significant expansion of String Ribbon wafer manufacturing in Wuhan, China. The parties expect to finalize the terms of the manufacturing relationship over the next 90 days, including obtaining project financing and other approvals and permits, and plan to begin production in the second quarter of 2010.
Under the agreement,
- Evergreen Solar will manufacture String Ribbon wafers using its state of the art Quad furnaces at a leased facility being built in Wuhan, China on Jiawei’s campus.
- Jiawei will process String Ribbon wafers into Evergreen Solar-branded panels on a subcontract basis.
- Evergreen Solar will reimburse Jiawei for its cell and panel conversion costs, plus subcontractor fee. The actual price paid to Jiawei will be negotiated annually.
- The Wuhan government will provide, or coordinate with other Chinese governmental agencies, various incentives, including guarantees necessary to obtain third-party bank or other financing.
- Initial capacity is expected to be approximately 100 MW and the parties intend to expand production capacity to approximately 500 MW by 2012, the timing and extent of which will be determined in 2010.
The establishment of our wafer manufacturing facility and the subcontractor relationship with Jiawei remains subject to the satisfaction of certain conditions, including financing, various import/export and construction permits and the negotiation of definitive agreements between Evergreen Solar and Jiawei.
“We are thrilled about our new relationship with Jiawei and the support that we are receiving from the Wuhan Management Committee, said Richard M. Feldt, Chairman, CEO and President. The cost of our 100 MW wafer facility will be between $40 million and $50 million and we will seek financing for about two thirds of that amount, reducing our portion of initial capital required to approximately $15 million to $20 million.
“Combining our unique low-cost String Ribbon wafer manufacturing technology with Jiawei’s proven low cost manufacturing capabilities will result in a compelling value proposition for our customers and the solar industry. At full capacity of about 25 MW per quarter by the end of 2010, we expect that total manufacturing cost of String Ribbon panels produced in China, including Jiawei’s subcontractor fee, will be in the range of $1.40 per watt to $1.50 per watt. As the price of silicon returns to its historic level of about $50 per kilogram and as both companies work together to improve technologies and reduce manufacturing costs, we believe that total manufacturing cost could be reduced to approximately $1.00 per watt by the end of 2012,” Feldt concluded.