Evergreen wants to expand, but it has limited financing capabilities:
We have a total contractual backlog of approximately one gigawatt extending over the next five years… Obtaining funding for factory expansions at a cost of capital commensurate with the expected financial return of such expansions [is] not available given the turmoil in the financial markets.
So the solar energy company will subcontract to Asia:
We have entered discussions with subcontract manufacturers. We will provide wafer using our industry leading string ribbon technology and they would convert those wafers to cells and panels.
We are finding that subcontract is our interest in making an investment in a cell and panel factory or in some cases using existing capacity... They have said they think the solar is very attractive because there are historic segments i.e., the electronic industry has really slowed down.
Helping an already hard-hit industry:
Using a subcontractor would significantly reduce our need for expansion capital, while allowing us to meet our sales expansion goals. For example, we have stated that our next factory, built in Asia would cost about $1.50 per watt to build or about $225 million for 150 megawatts facility.
Under the subcontract manufacturing arrangement we could reduce our capital needs by about 75%, meaning we will be about $56 million instead of $225 million and still meet our sales goals in 2010.
Some subcontractors... have approached us. Mostly with operations in Asia saying in most cases they have got excess capacity as their electronic subcontract manufacturers and they would be interested in making cells and panels for us and so in our minds eyes as we have not a lot of work here we do think that is if you can marry our advance wafer technology with sort of inherent lower cost reduction capabilities that exist in Asia.
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