The recent bankruptcy of Evergreen Solar exemplifies the risks that community leaders face in a maturing industry that has been heavily subsidized by federal, state and local governments.   The Massachusetts-based solar materials manufacturer announced the closure of two manufacturing plants as a result of the company’s failure.   

In March, Evergreen shut down its massive manufacturing facility in Devens, Massachusetts, laying off 800 workers.   Following the shut down, the state of Massachusetts pulled the $58 million in incentives it gave Evergreen to bring jobs to the area. It was the largest tax incentive package in the state’s history.

In addition, a smaller manufacturing facility in Midland, Michigan was shuttered which employed around 80 people.  Evergreen came to Midland in 2008 and completed its $55 million, 31,400-square-foot building.  The solar company chose to build in Midland to be close to one of its suppliers, Dow Corning Corp., which provided materials that go into its string ribbon technology, and because of the $5.7 million it received in state and city tax incentives. 

The following negative press circulated after the announcement:

• Evergreen another example of wasted taxpayers' dollars under ARRA — Michigan Capitol Confidential
• Overrun by Chinese rivals, US solar company falters — Wall Street Journal
• Evergreen experiment is a failure, but fantasy that state can buy new jobs may live on — Boston Herald
• Nevergreen Solar: Another political investment goes bust — Wall Street Journal
• Solar power: the sun also sets — Financial Times

The demise of Evergreen Solar should make economic developers to think twice about their targeted industries and how they evaluate corporations seeking to expand in their communities.  Industries like the solar and wind sectors may sound appealing today but you really need to evaluate each company’s specific business plan and their financial backing.  The concept is really no different than what a bank or a landlord goes through when determining the credit worthiness of companies. 

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