Evergreen Solar CEO explains why company left Mass.

by: Jan A

Sun Jan 30, 2011 at 13:59:11 PM EST

We make silicon wafers that go into solar panels. In 2008 we decided to build a plant in Massachusetts to be near our research and development facility. There was a groundswell of optimism that the U.S. was going to take the lead in the drive for alternative energy.

There were challenges from the start. Lehman Brothers was our banker and had almost a third of our outstanding shares as part of a financing transaction. That disappeared in Lehman's bankruptcy and cost us about $300 million. Then we went to the federal government to get help from the TARP funds, but they said no because we weren't a financial institution.

In December 2008 we were approached by a Chinese company, Jiawei, which was impressed with our wafer technology. The Chinese government agreed to support a loan that would cover two-thirds of our expansion in China. The subsidies we received from the government here covered less than 5 percent of the cost of our U.S. plant. We received $20 million and some future tax credits, but you can't pay taxes if you don't make money.

According to El-Hillow, the Chinese subsidize businesses that are geared to the future; we subsidize bankers.  Is this "fair" trade?  I don't think so.