Evergreen Solar Inc. (ESLR) develops, produces and markets proprietary solar power products. The Company’s technology uses less polysilicon than more commonly-used manufacturing processes within the industry. The Company’s products are marketed under the brand name String Ribbon (TM) for residential and commercial applications worldwide.

Founded in 1994, the Company is headquartered in Marlboro, Massachusetts.

Source: Reuters.com, SEC Filings.

Source: Reuters.com

The mean of 23 analysts polled by Thomson Reuters rate shares of ESLR a “Hold.” The details of the analysts polled are as follows:

Analyst Recommendations and Revisions

Source: Reuters.com

Overview

ESLR develops, produces and markets proprietary solar power products. The Company’s technology uses less polysilicon than more commonly-used manufacturing processes. The Company’s products are marketed for residential and commercial applications worldwide.

PV Market

The market for photovoltaics (PV) reached nearly $20 billion in 2008, with estimates of a total market size reaching $34 billion by 2013. The rapid growth in this sector presents varied opportunities, as the direction of this sector is expected to continue indefinitely at varying rates of growth.

Initially, the most likely leading consumer of PV technology will come from commercial and public entities, as the economic advantages of PV is of paramount concern of stockholders as well as state and municipal government officials struggling with tight and in many cases shrinking budgets.

Market growth is dependent upon PV per watt unit costs and the price of competing energy sources. PV technology is very attractive as an alternative to traditionally produced electricity as higher oil price levels are achieved, which has driven a flood of new investment into PV during most of this decade. With increasing government-sanctioned programs, tax cuts, grants, better overall returns on investment capital are expected to facilitate rapid consumer acceptance and adoption of PV technology.

Fossil Fuels Prices, Industrial Production and Energy Supply Constraints Drive PV Market

The Company’s ability to grow its business track investor investment flow and the spot price of oil and natural gas, the price, of which, exploded to $147 per barrel of oil and $13.5 per mcf (million cubic feet) of natural gas in late June of 2008, then dropped to $35 per barrel and $3.50 per mcf, respectively, in December. Since December, oil recovered to $70+ per barrel, while natural gas is now expected to reach $5 to $6 per mcf by the end of 2009.

Correlation analysis reveals as the price of spot oil and natural gas rise, investment volume into solar technologies and stock prices rise. Publicly traded solar companies rallied strongly in 2008 during the strong move up in the price of oil, and conversely dropped along with the spot price of fossil fuels.

Since capital formation of the PV market is correlated strongly to fossil fuels prices, factors affecting oil and natural gas price are important considerations in an investment into any alternative fuels enterprise. Therefore, factors affecting the prices of fossil fuels play the largest role in the success of alternative energy sources, including PV technologies.

Energy analysts cite the post-June 2008 plunge and subsequent oversold condition in oil and gas prices to panic liquidation of contracts by hedge fund managers during the credit and liquidity crisis, which began in earnest in September of 2008. However, as the global economy stabilizes, the spot price of coal, oil, and its popular substitute, natural gas, are expected to firm, said the Energy Information Administration (EIA).

Other private energy analysts such as Matt Simmons of Simmons & Company, and William Powers of Powers Energy Investor hold more optimist price levels of oil and natural gas prices, both citing evidence of world peak oil production and expected increased demand as world GDP begins to regain its upward projection. Consumer and investor demand for alternative energy sources will rise significantly as a result of the dis-functioning dynamics expected in the oil and natural gas market early next year. PV will play a significant role in the public and private shift toward alternative fuel solutions during ever decreasing inventories of oil.

Global production remains a key driver of fossil fuels prices and alternative energy investment, with production in both OECD and ASEAN countries weighing heavily on total world production outputs. Most economists expect a rebound in durable goods production in Asia, especially China. China’s real GDP growth is expected to reach 8.3% in 2009, officially, while GDP growth in the OECD countries is anticipated to be flat or rise slightly.

Since the demand for energy correlates strongly with overall economic activity, oil and natural gas prices may continue higher as excess inventories are depleted and diminishing new supplies struggle to satisfy this demand sometime in 2010, according to the Energy Information Administration (EIA). Increased investment in PV technologies is expected to follow GDP growth, which affect fossil fuels prices and demand for alternatives.

The U.S. Dollar and the PV Market

The nature of most transactions made in the oil market is another bullish factor affecting investment into alternative energy technologies such as PV. Since the majority of transactions for oil are conducted in the U.S. dollar, the anticipated continuation of the dollar’s decline will attract hedge funds and institutions into purchasing oil and natural gas as a currency hedge to further declines in the Greenback.

As the dollar reach record lows on the USD Index, oil and natural gas prices were reaching record highs. A re-test of the lows of the U.S. dollar increases demand from institutional and hedge fund managers for oil and natural gas, as these markets are the deepest and most liquid in the commodities space. The PV sector will be among many beneficiaries of the bear market in U.S. dollar.

PV in the Short Term

Presently, the supply/demand fundamentals for the industry are unfavorable to producers of PV panels.

Globally, the demand for panels has dropped significantly following the initial surge earlier in the decade. The cost of producing electricity from PV is approximately four times more than power derived from natural gas. Natural gas prices must rise significantly from current levels to move private industry toward PV solutions. Government initiatives to deploy PV panels have supported the solar market through conversions and investment in utilities’ increasing usage of solar power. Until renewed world GDP growth puts intense upward pressure on fossil fuels prices, meaningful demand from the private sector remains weak.

The supply of solar panel capacity reached 9,000 megawatts in 2008, while demand contracted to approximately 6,100 megawatts during the same time. Industry analysts expect this supply/demand imbalance to continue through 2012.

Company News

On September 24, the Company announced that Dr. J. Terry Bailey, senior vice president of marketing and sales has taken a new position with a solar company in California. Richard M. Feldt, chairman, president and CEO has taken on the responsibilities of Bailey. Additionally, Michael El-Hillow, chief financial officer, has taken additional responsibility for administration and operations worldwide.

On September 23, the Company announced that Henry Ng has joined the Company as general manager – Asian operations. Ng held senior positions at Asian-based companies, primarily at Sony.

Source: http://stockcharts.com/h-sc/ui?s=eslr

ESLR trades below its 13-day moving average. This bullish sign is significant because the moving average are also negatively trending.

The MACD for ESLR currently indicates a bearish signal. The MACD is below the signal line, a 9-day moving average of the MACD. The MACD is also below, however, the critical level of 0, which implies the past price action had been negative. Overall, the chart is bearish in the short term.

Source: Thomson Financial