Steven Syre | Boston Capital

Not-so-tasty carrots

By Steven Syre
Globe Columnist / February 4, 2011

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So we finally got to hear from the man who decided to close the Evergreen Solar plant in Devens, laying off 800 workers and reigniting a debate in Massachusetts about what government should do to support businesses in emerging industries.

The chief executive of Evergreen Solar, Michael El-Hillow, provided Bloomberg Businessweek with an “as told to’’ account of the things he tried before concluding he had to close the Devens plant, subsidized with grants, tax breaks, and other carrots from the state, and move the work to China.

Read his account, and you get the feeling Evergreen Solar’s future in Massachusetts was doomed, no matter what he tried.

A company that long received subsidies yet never made money could not stand on its own when business got really tough. El-Hillow’s options were limited to asking others — governments and banks — for more help that wasn’t coming.

El-Hillow cites genuine business problems and financial pressure he says would have driven the company to insolvency within a year. But he also sheds light on a kind of tin-cup capitalism that leaves no doubt what a mistake the state made with its biggest economic bet on solar power. Evergreen’s cup doesn’t seem to have a bottom.

El-Hillow describes how the Chinese government offered to support a loan that would cover two-thirds of Evergreen’s Solar cost to expand its manufacturing facilities in China. The subsidies Evergreen Solar received from Massachusetts covered a mere 5 percent of the cost of the Devens plant, he laments.

The company was also promised those future tax credits, “but you can’t pay taxes if you don’t make money.’’ Good point.

Being profitable has always been an issue for Evergreen Solar, which lost money every year since going public a decade ago. It has gotten worse over the past several years. El-Hillow says declining market prices for the company’s products just kept turning up the heat. The obvious strategy: get the tin cup out again.

“I wrote to the governor of Massachusetts, and we went to everyone we could think of — Congress, our banks. Nobody could help us,’’ he writes.

Actually, Evergreen officials say now that they may not have written to Governor Deval Patrick himself, but one way or another they kept in contact with his administration. You get the idea.

El-Hillow explains how Evergreen got caught up in the meltdown at Lehman Brothers, which held a large amount of the company’s stock as part of a financing. He even went to the federal government, seeking money from the Troubled Asset Relief Program, but was turned down because Evergreen isn’t, well, a financial institution.

On the other hand, it’s raining money in China. “The access to capital for start-ups there is staggering,’’ El-Hillow says.

But Evergreen Solar is no start-up, and it has no reason to complain about access to US capital markets. Since it initial public offering in 2000, Evergreen has raised about $450 million in stock sales and $500 million from two debt offerings.

Capital and big loans aren’t Evergreen’s real problems. Steep Chinese solar subsidies and inexpensive labor are the true competitive issues — big ones. You can call that unfair.

But Massachusetts can’t and should not compete against forces like that. In a difficult economy, Evergreen Solar would have to sink or swim on its own in Massachusetts.

There was one other option. China, it turns out, made the decision for El-Hillow.

Steven Syre is a Globe columnist. He can be reached at