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Evergreen Solar (NASDAQ: ESLR), manufacturer of solar products using its 'String Ribbon' wafer technology, said yesterday that it has landed its largest sales agreement to date, a $200 million deal to SunEdison, LLC, a Baltimore company that sells solar-generated power. The agreement calls for Evergreen Solar to ship approximately $200 million of photovoltaic modules to SunEdison, LLC over the next five years.

This sales agreement is the company's fifth major contract since November 2005 bringing their total to more than $600 million over the next five years.

In the String Ribbon technique, two high temperature strings are pulled vertically through a shallow silicon melt, and the molten silicon spans and freezes between the strings (diagram below). 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.

Third and current generation furnaces, their Gemini platform, grow two 3.2-inch-wide ribbons at a much faster speed than their original furnaces. Current ribbons are ~200 micrometer thick; 100 micrometer thick ribbons and four-ribbon technology are under development.

The photovoltaic modules will be manufactured at Evergreen Solar's plant in Massachusetts with a 15 MW/yr capacity and at the new 30MW/yr EverQ factory in Thalheim, Germany. The EverQ factory began volume shipments in April of this year. Evergreen intends to expand EverQ's capacity to 80MW in 2007 and up to 300MW by 2010.

EverQ is a strategic partnership of Evergreen Solar, Inc. of the United States, Q-Cells AG of Germany, and Renewable Energy Corporation ASA of Norway. Q-Cells is the world's largest independent manufacturer of crystalline silicon solar cells. Renewable Energy Corporation is one of the world's largest manufacturers of solar-grade silicon and multicrystalline wafers.

SunEdison, LLC, headquartered in Baltimore, Maryland, offers clients an innovative set of financial solutions based around solar technologies, to meet the energy needs of its clients. SunEdison provides solar generated energy at or below current retail utility rates to a broad and diverse client base - from public agencies to private enterprises to non-profit organizations. For more information about SunEdison, visit www.sunedison.com.

Evergreen's "thinner" cells, made with manufacturing techniques that reduce silicon consumption give Evergreen an advantage in this era of short silicon supplies. By giving up 15% of the ownership of their EverQ operation to their silicon supplier they have a secure supply. Although they have slightly lower efficiency that their competitors, they make up for this in lower cost and better utilization of space in a solar panel.

They have been expanding rather conservatively, allowing their technology to be developed in line with their production. They have nearly completed conversion of all of their production to "Gen III" and have announced that they will stop shipping older technology products by Sept 1. I expect they will be announcing Gen IV technology next year.

ESLR 1-yr chart:


Resources:

Evergreen Solar Announces $200 Million Sales Agreement With SunEdison, LLC; Evergreen Solar's Recent Contract Awards Exceed $600 Million Over the Next Five Years, Evergreen press release, July 19, 2006

Evergreen Solar
, Marlboro, MA USA

Source: Evergreen Solar's Sales are Mounting