Renewable Energy Joins EverQ Partnership

November 27, 2005 by Jeff Shepard

Evergreen Solar, Inc. (Marlboro, MA) and Q-Cells AG (Thalheim, Germany) announced a partnership with Renewable Energy Corporation ASA (REC), based in Hovik, Norway. The world's largest manufacturer of solar-grade silicon and multicrystalline wafers, REC is joining EverQ, a strategic partnership between Evergreen Solar and Q-Cells that is currently building a 30-megawatt solar wafer, cell and module manufacturing plant in Thalheim, Germany.

In conjunction with becoming a stakeholder in EverQ, REC has agreed to the long-term supply of solar-grade silicon to Evergreen Solar and EverQ. Under terms of the seven-year agreement, REC will initially supply Evergreen Solar with 60 metric tons and EverQ with 190 metric tons of solar-grade silicon annually. Additionally, REC will license to EverQ certain of its proprietary manufacturing technology. In exchange, REC will acquire a 15% ownership position in EverQ on a cost-of-capital basis. Following REC's initial investment, Evergreen Solar will own 64% of EverQ, Q-Cells 21% and REC 15%. The agreements contemplate that when REC establishes planned additional facilities for the production of silicon, it will offer to EverQ a second long-term supply agreement that would substantially increase REC's supply of silicon to EverQ. Should REC offer this second supply agreement, REC will be entitled to increase its ownership stake in EverQ to as much as one-third. The amended master agreement contemplates that Q-Cells will also be able to increase its ownership stake to one-third of EverQ.

"The addition of REC to the EverQ partnership is a landmark event for our joint venture and the entire solar industry," said Richard M. Feldt, President and Chief Executive Officer of Evergreen Solar. "At a time of potential silicon shortages and extremely high prices, EverQ now has an increased supply of silicon to facilitate rapid growth. Uniting REC's newly developed granular silicon with distinctive technologies from our three companies has the potential to dramatically reduce the overall cost of producing solar products and set a new worldwide standard for solar power."

Erik Thorsen, President and CEO of REC, stated, "Over the past three years, REC has made significant investments to develop a new process for making granular silicon for the PV industry. This product is an exceptionally good fit for the String Ribbon wafer manufacturing process. Because of global supply constraints, we expect the value of solar-grade silicon to remain at high levels for the next several years. We view EverQ, with Evergreen's wafer technology and Q-Cells' cell manufacturing capabilities, as an opportunity for REC to strategically leverage its future silicon expansion plans."

Anton Milner, CEO and a founder of Q-Cells, said, "REC's decision to join EverQ further validates the unique advantages that have been created by combining Evergreen Solar's String Ribbon technology with Q-Cells' high-performance solar cell manufacturing capabilities. Adding REC, a world-class silicon supplier, to the partnership will assist us in developing EverQ more rapidly and cost effectively into a world-leading supplier to the global solar marketplace. We believe EverQ's Thalheim facility will establish an ideal prototype that EverQ can replicate in emerging solar markets around the world."

The 30-megawatt Thalheim facility is currently under construction and is scheduled to commence full-scale operations by the summer of 2006. The German government is providing EverQ with grants totaling approximately $34 million to offset manufacturing facility construction costs, which are anticipated to be $75 million. The plant is expected to create between 350 and 400 new jobs in the Saxony-Anhalt region. Based on the initial success of the facility, EverQ will then evaluate the possibility of expanding the facility from 30 megawatts up to 120 megawatts of capacity.