RENEWABLOG

The Evergreen Solar PR Nightmare: Shareholders and Taxpayers are Strange Bedfellows

In one of the most disappointing moves in the era of taxpayer and policy-backed cleantech, Evergreen Solar announced that it will close its Devens plant and lay off 800 people. This after taking $58 million in state taxpayer money to construct the plant.

As a PR professional and as someone who works for a firm that also offers GR services, there is no silver lining in this news. In an political era of absolutes and no middle ground, Evergreen has given clean technology naysayers ammo to argue that government support of renewables is a bad idea.

As someone who lives in the Bay Area, but grew up 20 miles west of Devens in a small town called Westminster, I am sad for Central Massachusetts, which could certainly use the 800 paid jobs and seeds of a new industry that Evergreen had planted.

As a realist, it has reinforced what has long been a belief of mine: That when a company has a choice between shareholders and Joe and Jane Taxpayer, they will choose shareholders every time as is their obligation as a public company. Does this mean that the government shouldn't invest in helping develop private industry in its region to stimulate jobs? No. But it may give the government pause about exactly the type and size of investment they should make.

Would it be great it just one company stood up and said, "margins be damned, we're going to stick by the commitment we made to the state of X and the millions of taxpayers who have supported us?" Sure. But they would be hammered by investor lawsuits immediately thereafter and likely have to reverse course.

So what is the only potential savior in this situation? That another company that can compete on cost while manufacturing in Massachusetts acquires the plant and starts production soon, similar to what Tesla has done with the NUMMI plant in Fremont. We have to hope that those skilled, 800 workers get their jobs back with a company committed to the region.

From a more macro point of view, it begs the question if more regions should take a page from Ontario and set a requirement that a certain percentage of product included in a system must be manufactured locally to qualify for a tax credit. Otherwise, there is little incentive for companies--especially public companies--to maintain a facility that increases its cost. Either that, or governments need to take a harder look at making more small, early-stage investments in companies that aren't yet beholden to Wall Street.

Posted by Jason Morris on January 12, 2011 at 11:31 AM