Let's face it: First Solar's
Evergreen Solar told us last time around that, given the prohibitive cost of capital, its best path for expansion was likely a subcontracting solution, in which a third party would take the company's proprietary wafers and fabricate them into Evergreen-branded panels. The company has now unveiled just such an agreement, with China's Jiawei Solar.
Jiawei Solar has done work for Evergreen Solar, as well as SunPower
That future sounds nice enough, but Evergreen Solar is running low on cash today. It has about $60 million available, with $57 million earmarked for other major capital commitments this year. So the company doesn't have much of a working capital cushion, let alone the money for this Chinese project. After last year's hair-raising capital raise (which was pulled off remarkably well), the company's going back to the capital markets once more.
I know that SunPower appeared to effortlessly raise more than $400 million this week (following a feeble first-quarter report, no less), but I just don't see Evergreen Solar receiving as warm a reception.
Fool contributor Toby Shute doesn't have a position in any company mentioned. Check out his Motley Fool CAPS profile or follow his articles using Twitter or RSS. The Motley Fool has a disclosure policy.