##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended July 1, 2006
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from to
 COMMISSION FILE NUMBER 000-31687
 EVERGREEN SOLAR, INC.
 (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 DELAWARE
    
    04-3242254(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)138 BARTLETT STREETMARLBORO, MASSACHUSETTS
    
    01752(Address of principal executive offices)
    
    (Zip Code)
 (508) 357-2221  (REGISTRANTS TELEPHONE NUMBER, INCLUDING AREA CODE)
 (FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF CHANGED SINCE LAST REPORT)
 þ o
  o þ o
 o þ




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##### 



EVERGREEN SOLAR, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JULY 1, 2006
 TABLE OF CONTENTS
 PART I. FINANCIAL INFORMATIONITEM 1. FINANCIAL STATEMENTS
    
    
    4Condensed Consolidated Balance Sheets
    
    
    4Condensed Consolidated Statements of Operations
    
    
    5Condensed Consolidated Statements of Cash Flows
    
    
    6Notes to Condensed Consolidated Financial Statements
    
    
    7ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    17ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
    
    
    23ITEM 4. CONTROLS AND PROCEDURES
    
    
    23PART II. OTHER INFORMATIONITEM 1. LEGAL PROCEEDINGS
    
    
    24ITEM 1A. RISK FACTORS
    
    
    24ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    
    
    39ITEM 3. DEFAULTS UPON SENIOR SECURITIES
    
    
    39ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    39ITEM 5. OTHER INFORMATION
    
    
    39ITEM 6. EXHIBITS
    
    
    40SIGNATURES
    
    
    43Ex-31.1 Section 302 Certification of CEOEx-31.2 Section 302 Certification of CFOEx-32.1 Section 906 Certification of CEOEx-32.2 Section 906 Certification of CFO
  2




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##### Table of Contents



CONCERNS REGARDING FORWARD-LOOKING STATEMENTS
 This
Quarterly Report on Form 10-Q, including Managements
Discussion and Analysis of Financial Condition and Results of
Operations in Item 2 of Part I and Risk Factors in Item 1A of Part II of this report, contains
forward-looking statements that involve risks, uncertainties and assumptions. If the risks or
uncertainties ever materialize or the assumptions prove incorrect, the results of the Company
may differ materially from those expressed or implied by such forward-looking statements and
assumptions. All statements other than statements of historical fact are statements that
could be deemed forward-looking statements, including but not limited to statements regarding
the Companys projections regarding future growth, revenue, costs of revenue, earnings and
gross margins improvement; any statements of the plans, strategies and objectives of management
for future operations; future warranty expenses; the Companys expectations regarding EverQs
future growth, revenue, costs of revenue and earnings; the future ownership of EverQ; the
future accounting treatment of EverQ; contributions by our strategic partners Q-Cells AG
and Renewable Energy Corporation to EverQ and the successful integration of our proprietary
technologies; the impact and terms and conditions of the proposed supply agreements and
amended joint venture documents; receipt of public grant awards; capital requirements to
respond to competitive pressures and acquire complementary businesses and necessary
technologies; pursuit of future research contracts that are not part of our current ongoing research activities; costs associated with research and development, building or improving manufacturing facilities, general and administrative expenses,
business growth and our status as a public company; the success of the Companys
research and development activities; shifts in our geographic product revenue mix; the
manufacturing capacity of the Company and its plans for its Marlboro facility; domestic
and international expansion of strategic partnerships, manufacturing operations and
distribution networks; operating efficiency of manufacturing facilities including
increases in manufacturing scale and technological improvements; the occurrence of
and the use of proceeds from sales of our securities; the sufficiency of our cash, cash
equivalents and marketable securities to satisfy our anticipated cash requirements; sufficiency of our insurance
levels for product liability claims; payment of cash dividends; use of derivative
financial instruments to manage foreign currency exchange risks; the potential
impact of our critical accounting policies and changes in financial accounting
standards or practices; the Companys plans for expansion and operation of the EverQ
facility and its production schedule; the Companys expectations regarding the marketing
and sales of EverQ modules and the revenues of the Company associated with the resale of
such modules; the Companys goal of transitioning to thin wafer production and the expected
timing and results of such transition; the expected timing of the EverQ facility becoming
fully operational; the expected demand for solar energy; expectations regarding product
performance and cost and technological competitiveness; expectations regarding the
Companys and EverQs future silicon supply; the anticipated benefits of the Companys
String Ribbon technology; the making of strategic investments and the expectation of
future benefit from them; the Companys ability to hire the necessary personnel to
successfully develop and market its products; the development of the quad technology
platform and its potential effects on crystal growth; the Companys position in the
solar power market; and the Companys ability to reduce the costs of producing solar
products and are made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These statements may be identified with such words
as we expect, we believe, we
anticipate or similar indications of future
expectations. These statements are neither promises nor guarantees and involve
risks and uncertainties, which could cause our actual results to differ materially
from such forward-looking statements. Such risks and uncertainties may include, among
other things, macroeconomic and geopolitical trends and events, the execution and
performance of contracts by customers, suppliers and partners, and other risks and
uncertainties described herein, including but not limited to the items discussed
in Managements Discussion and Analysis of Financial
Condition and Results of Operations
in Item 2 of Part I and Risk Factors in Item 1A of Part II of this report and that are
otherwise described from time to time in our filings with the Securities and Exchange
Commission (SEC), copies of which may be accessed through the SECs web site
at http://www.sec.gov. We caution readers not to place undue reliance on any
forward-looking statements contained in this Quarterly Report, which speak only
as of the date of this Quarterly Report. We disclaim any obligation to publicly
update or revise any such statements to reflect any change in our expectations,
or events, conditions, or circumstances on which any such statements may be based,
or that may affect the likelihood that actual results will differ from those set
forth in such forward-looking statements.
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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 Evergreen Solar, Inc.
 
 Condensed Consolidated Balance Sheets
(in thousands, except share data)
(unaudited)
 December 31,
    
    
    July 1,2005
    
    
    2006AssetsCurrent assets:Cash and cash equivalents
    
    $
    30,742
    
    
    $
    25,296Marketable securities
    
    
    85,465
    
    
    
    67,499Accounts receivable, net of allowances for doubtful accounts and
sales discounts
of $65 and $0 at December 31, 2005 and July 1, 2006, respectively
    
    
    4,124
    
    
    
    18,404Grants receivable
    
    
    16,295
    
    
    
    17,082Inventory
    
    
    3,634
    
    
    
    11,867Interest receivable
    
    
    541
    
    
    
    1,064Other current assets
    
    
    4,052
    
    
    
    12,581Total current assets
    
    
    144,853
    
    
    
    153,793Deposits
    
    
    8,217
    
    
    
    1,170Long-term investments
    
    
    
    
    
    
    3,053Restricted cash
    
    
    1,582
    
    
    
    1,020Deferred financing costs
    
    
    2,877
    
    
    
    2,656Fixed assets, net
    
    
    71,430
    
    
    
    119,662Total assets
    
    $
    228,959
    
    
    $
    281,354Liabilities, minority interest and stockholders equityCurrent liabilities:Accounts payable
    
    $
    12,210
    
    
    $
    15,417Short term borrowings
    
    
    4,131
    
    
    
    19,044Other accrued expenses
    
    
    1,625
    
    
    
    15,167Accrued employee compensation
    
    
    1,778
    
    
    
    1,789Accrued warranty
    
    
    705
    
    
    
    705Total current liabilities
    
    
    20,449
    
    
    
    52,122Subordinated convertible notes
    
    
    90,000
    
    
    
    90,000Deferred grants
    
    
    16,284
    
    
    
    23,087Other long-term debt
    
    
    3,553
    
    
    
    16,875Total liabilities
    
    
    130,286
    
    
    
    182,084Minority interest in EverQ
    
    
    11,223
    
    
    
    9,657Stockholders equity:Common stock, $0.01 par value, 100,000,000 shares authorized,
61,965,231 and 67,143,913 issued and outstanding at December 31,
2005
and July 1, 2006, respectively
    
    
    620
    
    
    
    673Additional paid-in capital
    
    
    182,345
    
    
    
    197,501Accumulated deficit
    
    
    (93,009
    )
    
    
    (108,608
    )Deferred compensation
    
    
    (1,036
    )
    
    
    Accumulated other comprehensive income (loss)
    
    
    (1,470
    )
    
    
    47Total stockholders equity
    
    
    87,450
    
    
    
    89,613Total liabilities, minority interest and stockholders equity
    
    $
    228,959
    
    
    $
    281,354
  4




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##### Table of Contents



Evergreen Solar, Inc.
 
 Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
 Quarter Ended
    
    
    Year-to-date Period EndedJuly 2,
    
    
    July 1,
    
    
    July 2,
    
    
    July 1,2005
    
    
    2006
    
    
    2005
    
    
    2006Revenues:Product revenues
    
    $
    10,679
    
    
    $
    22,048
    
    
    $
    20,966
    
    
    $
    33,614Research revenues
    
    
    
    
    
    
    354
    
    
    
    235
    
    
    
    680Total revenues
    
    
    10,679
    
    
    
    22,402
    
    
    
    21,201
    
    
    
    34,294Cost of revenue:Product revenue costs
    
    
    10,018
    
    
    
    21,121
    
    
    
    19,953
    
    
    
    34,129Research revenue costs
    
    
    
    
    
    
    354
    
    
    
    235
    
    
    
    680Total cost of revenue
    
    
    10,018
    
    
    
    21,475
    
    
    
    20,188
    
    
    
    34,809Gross profit
    
    
    661
    
    
    
    927
    
    
    
    1,013
    
    
    
    (515
    )Operating expenses:Research and development expenses
    
    
    2,647
    
    
    
    3,958
    
    
    
    4,737
    
    
    
    8,151Selling, general and administrative expenses
    
    
    2,992
    
    
    
    6,396
    
    
    
    4,952
    
    
    
    10,796Total operating expenses
    
    
    5,639
    
    
    
    10,354
    
    
    
    9,689
    
    
    
    18,947Operating loss
    
    
    (4,978
    )
    
    
    (9,427
    )
    
    
    (8,676
    )
    
    
    (19,462
    )Other incomeForeign exchange gains (losses), net
    
    
    (194
    )
    
    
    1,419
    
    
    
    86
    
    
    
    1,959Interest income
    
    
    504
    
    
    
    1,264
    
    
    
    750
    
    
    
    2,602Interest expense
    
    
    (107
    )
    
    
    (1,650
    )
    
    
    (195
    )
    
    
    (3,110
    )Loss from operations before minority interest
    
    
    (4,775
    )
    
    
    (8,394
    )
    
    
    (8,035
    )
    
    
    (18,011
    )Minority interest in EverQ
    
    
    282
    
    
    
    929
    
    
    
    323
    
    
    
    2,412Net loss
    
    $
    (4,493
    )
    
    $
    (7,465
    )
    
    $
    (7,712
    )
    
    $
    (15,599
    )Net loss per share (basic and diluted)
    
    $
    (0.07
    )
    
    $
    (0.11
    )
    
    $
    (0.13
    )
    
    $
    (0.24
    )Weighted average shares used in computing basic and
diluted
net loss per share
    
    
    60,973
    
    
    
    65,789
    
    
    
    57,984
    
    
    
    64,780
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##### Table of Contents



Evergreen Solar, Inc.
 
 Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
 Year-to-date Period EndedJuly 2,
    
    
    July 1,2005
    
    
    2006Cash flows from operating activities:Net loss
    
    $
    (7,712
    )
    
    $
    (15,599
    )Adjustments to reconcile net loss to net cash used in operating
activities:Depreciation expense
    
    
    1,871
    
    
    
    3,297Amortization of deferred grant credits
    
    
    
    
    
    
    (211
    )Loss on disposal of fixed assets
    
    
    
    
    
    
    222Minority interest in EverQ
    
    
    (323
    )
    
    
    (2,412
    )Amortization of convertible debt financing costs
    
    
    
    
    
    
    222Bad debt expense and provision for early payment discounts
    
    
    (15
    )
    
    
    (65
    )Accretion of bond premiums
    
    
    (178
    )
    
    
    (605
    )Compensation expense associated with employee stock options
    
    
    
    
    
    
    3,013Changes in operating assets and liabilites:Accounts receivable
    
    
    1,410
    
    
    
    (14,209
    )Prepaid inventory
    
    
    (1,510
    )
    
    
    Inventory
    
    
    (660
    )
    
    
    (7,950
    )Interest receivable
    
    
    (33
    )
    
    
    (523
    )Other current assets
    
    
    (905
    )
    
    
    (8,086
    )Grants receivable
    
    
    
    
    
    
    6,440Accounts payable
    
    
    5,033
    
    
    
    2,481Accrued expenses
    
    
    977
    
    
    
    13,204Net cash used in operating activities
    
    
    (2,045
    )
    
    
    (20,781
    )Cash flows from investing activities:Purchases of fixed assets
    
    
    (7,920
    )
    
    
    (46,841
    )Decrease in deposits on fixed assets under construction
    
    
    
    
    
    
    7,212Decrease (increase) in restricted cash
    
    
    (2,018
    )
    
    
    672Purchases of marketable securities
    
    
    (21,253
    )
    
    
    (38,297
    )Proceeds from sale and maturity of marketable securities
    
    
    13,119
    
    
    
    53,750Net cash used in investing activites
    
    
    (18,072
    )
    
    
    (23,504
    )Cash flows from financing activities:Proceeds from the issuance of common stock, net of offering costs
    
    
    62,335
    
    
    
    Proceeds from convertible debt financing, net of offering costs
    
    
    86,939
    
    
    
    Increase in long-term debt
    
    
    
    
    
    
    12,527Increase in short-term debt
    
    
    
    
    
    
    13,834Capital contribution to EverQ from minority interest holder
    
    
    3,788
    
    
    
    Proceeds from exercise of warrants
    
    
    
    
    
    
    11,305Proceeds from exercise of stock options, and
shares purchased under Employee Stock Purchase Plan
    
    
    315
    
    
    
    1,928Net cash flow provided by financing activities
    
    
    153,377
    
    
    
    39,594Effect of exchange rate changes on cash and cash equivalents
    
    
    (936
    )
    
    
    (755
    )Net increase in cash and cash equivalents
    
    
    132,324
    
    
    
    (5,446
    )Cash and cash equivalents at beginning of period
    
    
    5,379
    
    
    
    30,742Cash and cash equivalents at end of period
    
    $
    137,703
    
    
    $
    25,296
  6




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##### Table of Contents



Evergreen Solar, Inc.
 
 Notes to Condensed Consolidated Financial Statements
(unaudited)
 1. Basis of Presentation
      Stock-based Compensation
  7




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##### Table of Contents



2. Net Loss per Common Share
  3. Inventory
  December 31,
    
    
    July 1,2005
    
    
    2006Raw materials
    
    $
    2,929
    
    
    $
    8,525Work-in-process
    
    
    519
    
    
    
    2,516Finished goods
    
    
    186
    
    
    
    826$
    3,634
    
    
    $
    11,867
 4. Fixed Assets
  Useful
    
    
    December 31,
    
    
    July 1,Life
    
    
    2005
    
    
    2006Laboratory and manufacturing
equipment
    
    3-7 years
    
    $
    28,447
    
    
    $
    41,775Computer and office equipment
    
    3-7 years
    
    
    1,235
    
    
    
    1,918Leasehold improvements
    
    Lesser of 15 to 20 years or lease term
    
    
    8,360
    
    
    
    8,360Land
    
    
    N/A
    
    
    
    599
    
    
    
    661Buildings
    
    15 years
    
    
    
    
    
    
    23,741Assets under construction
    
    
    
    
    
    
    43,199
    
    
    
    56,94781,840
    
    
    
    133,402Less: Accumulated depreciation
    
    
    
    
    
    
    (10,410
    )
    
    
    (13,740
    )$
    71,430
    
    
    $
    119,662
 5. Guarantor Arrangements
  8




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##### Table of Contents



Product Warranty
  Indemnification Agreements
  EverQ Debt Guarantee
  Letters of Credit
  6. Stock-Based Compensation
  Year-to-dateQuarter Ended
    
    
    Period EndedJuly 1, 2006
    
    
    July 1, 2006Cost of product revenues
    
    $
    126
    
    
    $
    239Research
and
development expenses
    
    
    457
    
    
    
    786Selling,
general and administrative expenses
    
    
    1,263
    
    
    
    1,988
 9




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##### Table of Contents



Year-to-date
    

    
    Year-to-datePeriod Ended
    
    
    Period EndedJuly
2, 2005
    
    
    July 1, 2006Expected option term (years)
    
    
    7.00
    
    
    
    6.25Expected volatility factor
    
    
    90
    %
    
    
    130
    %Risk-free interest rate
    
    
    4.0
    %
    
    
    4.9%-5.1
    %Expected annual dividend yield
    
    
    0
    %
    
    
    0
    %
    Quarter Ended
    
    
    Year-to-Date Period EndedJuly 2, 2005
    
    
    July 2, 2005Net Loss
    
    
    
    
    
    
    Net LossPer
    
    
    
    
    
    
    PerBasic & Diluted
    
    
    
    
    
    
    Basic & DilutedNet Loss
    
    
    Share
    
    
    Net Loss
    
    
    ShareNet loss attributable to common stockholders, as reported
    
    $
    (4,493
    )
    
    $
    (0.07
    )
    
    $
    (7,712
    )
    
    $
    (0.13
    )Deduct: Total stock-based employee compensation expense
determined under the fair-value-based method for all awards
    
    
    (763
    )
    
    
    (0.01
    )
    
    
    (1,473
    )
    
    
    (0.03
    )Pro forma net loss
    
    $
    (5,256
    )
    
    $
    (0.08
    )
    
    $
    (9,185
    )
    
    $
    (0.16
    )
 10




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##### Table of Contents



Stock Incentive Plans
   Weighted-AverageShares
    
    
    Exercise PriceOutstanding at January 1 , 2006
    
    
    6,049,529
    
    
    $
    3.15Granted
    
    
    623,000
    
    
    
    14.56Exercised
    
    
    (750,273
    )
    
    
    2.37Terminated
    
    
    (164,712
    )
    
    
    4.01Outstanding at July 1, 2006
    
    
    5,757,544
    
    
    $
    4.53
  Options Outstanding
    
    Options ExercisableWeightedAverage
    
    Weighted
    
    
    
    
    
    WeightedRange of
    
    
    
    
    
    Remaining
    
    Average
    
    
    
    
    
    AverageExercise
    
    Number
    
    Contractual
    
    Exercise
    
    Number
    
    ExercisePrices
    
    Outstanding
    
    Life (Years)
    
    Price
    
    Exercisable
    
    Price$
    0.65
    -
    
    $
    1.60
    
    
    
    365,200
    
    
    
    5.73
    
    
    
    $ 1.33
    
    
    
    274,575
    
    
    
    $ 1.271.61
    -
    
    
    1.61
    
    
    
    1,638,000
    
    
    
    7.44
    
    
    
    1.61
    
    
    
    638,000
    
    
    
    1.611.68
    -
    
    
    2.17
    
    
    
    1,197,076
    
    
    
    6.97
    
    
    
    2.01
    
    
    
    618,948
    
    
    
    2.032.19
    -
    
    
    6.51
    
    
    
    1,168,468
    
    
    
    7.76
    
    
    
    3.93
    
    
    
    535,105
    
    
    
    4.056.53
    -
    
    
    19.00
    
    
    
    1,388,800
    
    
    
    8.66
    
    
    
    11.50
    
    
    
    343,396
    
    
    
    10.685,757,544
    
    
    
    7.59
    
    
    
    $4.53
    
    
    
    2,410,024
    
    
    
    $3.50
  11




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##### Table of Contents



Weighted-AverageGrant-dateNonvested Shares
    
    Shares
    
    
    Fair ValueOutstanding at January 1 , 2006
    
    
    100,000
    
    
    $
    10.42Granted
    
    
    1,046,713
    
    
    
    14.82Vested
    
    
    (6,988
    )
    
    
    12.21Terminated
    
    
    
    
    
    
    Outstanding at July 1, 2006
    
    
    1,139,725
    
    
    $
    14.43
   7. Stockholders Equity
    8. Segment Information
  12




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##### Table of Contents



Segment Revenue and Gross Profit
  Quarter Ended
    
    
    Year-to-date Period EndedJuly 2,
    
    
    July 1,
    
    
    July 2,
    
    
    July 1,2005
    
    
    2006
    
    
    2005
    
    
    2006Product revenueEvergreen Solar
    
    $
    10,679
    
    
    $
    21,649
    
    
    $
    20,966
    
    
    $
    33,215EverQ
    
    
    
    
    
    
    10,658
    
    
    
    
    
    
    
    10,658Eliminations
    
    
    
    
    
    
    (10,259
    )
    
    
    
    
    
    
    (10,259
    )Total
    
    $
    10,679
    
    
    $
    22,048
    
    
    $
    20,966
    
    
    $
    33,614Gross profitEvergreen Solar
    
    $
    661
    
    
    $
    1,273
    
    
    $
    1,013
    
    
    $
    2,306EverQ
    
    
    
    
    
    
    (346
    )
    
    
    
    
    
    
    (2,821
    )Total
    
    $
    661
    
    
    $
    927
    
    
    $
    1,013
    
    
    $
    (515
    )
 Geographic Concentration of Revenue Information
  Year-to-Date PeriodJuly 2,
    
    
    July 1,2005
    
    
    2006By geography:U.S. distributors
    
    
    34
    %
    
    
    33
    %U.S. Government (research revenue)
    
    
    1
    %
    
    
    2
    %Germany
    
    
    65
    %
    
    
    63
    %All other
    
    
    0
    %
    
    
    2
    %100
    %
    
    
    100
    %By customer:Ralos Vertriebes
    
    
    0
    %
    
    
    16
    %Donauer Solartechnik
    
    
    16
    %
    
    
    12
    %Krannich Solartechnik
    
    
    23
    %
    
    
    7
    %All other
    
    
    61
    %
    
    
    65
    %100
    %
    
    
    100
    %
 9. EverQ Investment Grants
  13




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10. Accumulated Other Comprehensive Loss
  Quarter Ended
    
    
    Year-to-Date Period EndedJuly 2,
    
    
    July 1,
    
    
    July 2,
    
    
    July 1,2005
    
    
    2006
    
    
    2005
    
    
    2006Net loss
    
    $
    (4,493
    )
    
    $
    (7,465
    )
    
    $
    (7,712
    )
    
    $
    (15,599
    )Other comprehensive income (loss):Unrealized gain (loss) on marketable securities
    
    
    12
    
    
    
    (26
    )
    
    
    25
    
    
    
    (64
    )Unrealized gain on permanent intercompany loans
    
    
    
    
    
    
    77
    
    
    
    
    
    
    
    77Cumulative translation adjustments
    
    
    (819
    )
    
    
    1,042
    
    
    
    (847
    )
    
    
    1,504Total comprehensive loss
    
    $
    (5,300
    )
    
    $
    (6,372
    )
    
    $
    (8,534
    )
    
    $
    (14,082
    )
 11. Long-Term Debt
  Redemption Period
    
    Price (%)Beginning on July 1, 2010 and ending on June 30, 2011
    
    
    101.250Beginning on July 1, 2011 and ending on June 30, 2012
    
    
    101.625On July 1, 2012
    
    
    100.000
    EverQ Long-term Debt
  14




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Evergreen Solar Loan to EverQ
  12. Recent Accounting Pronouncements
     15




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16




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The following discussion should be read in conjunction with the Condensed Consolidated Financial
Statements and the related notes that appear elsewhere in this document.
 EXECUTIVE OVERVIEW
 tm
      17




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CRITICAL ACCOUNTING POLICIES AND ESTIMATES
  Warranty
  Sales Discount Allowance
  Stock-based Compensation
  RESULTS OF OPERATIONS
 Revenues.
 18




---



##### Table of Contents



Cost of product revenues.
 Research and development expenses, including cost of research revenues.
 Selling, general and administrative expenses.
 Minority interest.
 Comparison of Quarters Ended July 1, 2006 and July 2, 2005
 Revenues .
  19




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Quarter EndedJuly 2,
    
    
    July 1,2005
    
    
    2006By geography:U.S. distributors
    
    
    39
    %
    
    
    33
    %U.S. Government (research revenue)
    
    
    0
    %
    
    
    2
    %Germany
    
    
    61
    %
    
    
    62
    %All other
    
    
    0
    %
    
    
    3
    %100
    %
    
    
    100
    %By customer:Ralos Vertriebes
    
    
    0
    %
    
    
    20
    %Goldbeck Solar
    
    
    0
    %
    
    
    13
    %Donauer Solartechnik
    
    
    14
    %
    
    
    10
    %Krannich Solartechnik
    
    
    15
    %
    
    
    4
    %All other
    
    
    71
    %
    
    
    53
    %100
    %
    
    
    100
    %
 Cost
of product revenues and gross margin.
  Research and development expenses.
 Selling, general and administrative expenses.
 Other income .
 20




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Net loss.
 Comparison of Year-to-Date Periods Ended July 1, 2006 and July 2, 2005
 Revenues .
   Year-to-Date PeriodJuly 2,
    
    
    July 1,2005
    
    
    2006By geography:U.S. distributors
    
    
    34
    %
    
    
    33
    %U.S. Government (research revenue)
    
    
    1
    %
    
    
    2
    %Germany
    
    
    65
    %
    
    
    63
    %All other
    
    
    0
    %
    
    
    2
    %100
    %
    
    
    100
    %By customer:Ralos Vertriebes
    
    
    0
    %
    
    
    16
    %Donauer Solartechnik
    
    
    16
    %
    
    
    12
    %Krannich Solartechnik
    
    
    23
    %
    
    
    7
    %All other
    
    
    61
    %
    
    
    65
    %100
    %
    
    
    100
    %
 Cost of product revenues and gross margin .
 Research and development expenses.
 21




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Selling, general and administrative expenses.
 Other income .
 Net loss.
 Liquidity and Capital Resources
       22




---



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Off-Balance Sheet Arrangements
  Contractual Obligations
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
 INTEREST RATE RISK
  FOREIGN CURRENCY EXCHANGE RATE RISK
  
 ITEM 4. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
  23




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Internal Control Over Financial Reporting
  Limitations Inherent in all Controls
  
 PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
 Certain Factors Which May Affect Future Results
 The factors discussed below are cautionary statements that identify important factors that could
cause actual results to differ materially from those anticipated by the forward-looking statements
contained in this report. For more information regarding the forward-looking statements contained
in this report, see Concerns Regarding Forwarding Looking Statements at the beginning of this
report. You should carefully consider the risks and uncertainties described below, together with
all of the other information included in this report, in considering our business and prospects.
The risks and uncertainties described below are not the only ones facing Evergreen Solar.
Additional risks and uncertainties not presently known to us also may impair our business
operations. The occurrence of any of the following risks could adversely affect our business,
financial condition or results of operations.
 Risks Relating to Our Industry, Products, Financial Results and Operations
 Evaluating our business and future prospects may be difficult due to the rapidly changing market
landscape.
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We have a history of losses, expect to incur substantial further losses and may not achieve or
maintain profitability in the future, which may decrease the market value of our stock.
  
    
    expand our manufacturing operations, whether domestically or internationally, including EverQ;
    
    develop our distribution network;
    
    continue to research and develop our products and manufacturing technologies;
    
    implement internal systems and infrastructure in conjunction with our growth; and
    
    hire additional personnel.
  We may need to raise significant additional capital in order to fund our operations and to continue
to grow our business, which subjects us to the risk that we may be unable to maintain or grow our
business as planned and that our stockholders may be subject to substantial additional dilution.
   Our ability to expand our manufacturing capacity and therefore to increase revenue and achieve
profitability depends to a large extent upon the success of EverQ. EverQ is subject to numerous
risks, many of which are outside of our control, and we cannot assure you that EverQ will achieve
its objective or otherwise be successful. If EverQ is not successful, our business would be
materially and adversely harmed and our stock price would decline.
  
    
    EverQ will be highly dependent on Q-Cells expertise in the rapid development of solar
product
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manufacturing facilities in Germany; therefore, if for any reason, Q-Cells does not devote the personnel necessary to assist us in the development of facilities in Germany, EverQ may experience delays and cost-overruns or may be unsuccessful in the establishment of the operation;
    
    EverQ contemplates that each of the EverQ partners will continue to contribute certain technologies to
EverQ in order to establish novel manufacturing processes based on a combination of our
respective technologies; as such, the success of EverQ depends on our ability to integrate
our respective technologies and manufacturing processes in order to produce competitive
solar products in the world marketplace; such integration is unproven and if we are unable
to integrate our technologies and manufacturing processes, the prospects for EverQ would be
limited;
    
    government grants that have been approved may be subject to forfeiture or repayment in whole
or in part if EverQ fails to continue to meet the conditions for such grants or if such
grants for any reason become unavailable from German or European Union sources;
    
    the establishment of the facilities may result in cost overruns, delays, equipment problems
and construction, start-up and other operating difficulties, any of which could adversely
affect the ability of EverQ to achieve or grow revenue on the timeframe we expect;
    
    Q-Cells and REC have the ability to influence the strategic direction of EverQ and other
material decisions of EverQ; as a result, we may be unable to take certain actions that we
believe would be in our best interests, which, given the expected materiality of EverQ to
our combined operations, could significantly harm our business; further, we may be liable to
third parties for the material decisions and actions of Q-Cells and REC in EverQ, which
actions may harm EverQ and our business;
    
    EverQ requires significant management attention and places significant strain on our ability
to manage effectively both our operations in Marlboro and the operations of EverQ in
Germany;
    
    EverQ may subject us to multiple, conflicting and changing laws, regulations and tax schemes;
    
    EverQ may be unable to obtain, maintain or enforce adequate intellectual property rights and
protection due to limited or unfavorable intellectual property protection and may be subject
to claims or suits alleging infringement of third party intellectual property rights;
    
    under certain circumstances, if we exit EverQ, EverQ will continue to have certain rights to
our proprietary technologies that we are licensing to it and thereby compete with us;
    
    two years after the termination of the master joint venture agreement, Q-Cells and REC may
engage in ribbon technology-related activities in competition with us;
    
    limitations on dividends or restrictions against repatriation of earnings may limit our
ability to capitalize on earnings from EverQ;
    
    the operation of the manufacturing facility may experience seasonal reductions in
productivity common in certain foreign countries, such as the summer months in Europe;
    
    EverQ may be subject to increases in tariffs, duties, price controls or other restrictions
on foreign currencies or trade barriers imposed by foreign countries;
    
    EverQ may be unable to successfully hire and retain the additional personnel necessary to
operate the facility or future facilities;
    
    we will be exposed to fluctuations in currency exchange rates; and
    
    we may experience difficulties in staffing and managing international operations, including
the difficulty in managing a geographically dispersed workforce in compliance with diverse
local laws and customs.
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EverQ subjects us to a risk that in the future we may be unable to consolidate EverQs financial
results into our financial statements.
  Our future success substantially depends on our ability to significantly increase our manufacturing
capacity through the development of additional manufacturing facilities. We may be unable to
achieve our capacity expansion goals, which would limit our growth potential, impair our operating
results and financial condition and cause our stock price to decline.
  
    
    we may need to continue to raise significant additional capital through the issuance of
equity or convertible or debt securities in order to finance the costs of development of any
additional facility, which we may be unable to do on reasonable terms or at all, and which
could be dilutive to our existing stockholders;
    
    the build-out of any additional facility will be subject to the risks inherent in the
development of a new manufacturing facility, including risks of delays and cost overruns as
a result of a number of factors, many of which may be out of our control, such as delays in
government approvals or problems with supplier relationships;
    
    our manufacturing processes, particularly those that incorporate improvements to our
String Ribbon technology, are unproven at a large scale and may prove difficult to implement
in any new facility;
    
    we may be required to depend on third parties or strategic partnerships that we establish
in the development and operation of a facility, which may subject us to risks that such
third parties do not fulfill their obligations to us under our arrangements with them;
    
    the establishment of any new facility will require significant management attention, and
our management team, which has limited experience in the development of such facilities, may
be unable to execute the expansion plan effectively; and
    
    if a new facility is established internationally, we may encounter legal restrictions and
liability, encounter commercial restrictions and incur taxes and other expenses to do so and
otherwise be subject to the risks inherent in conducting business in a foreign jurisdiction
as described elsewhere in this section.
  Because we depend on single and sole source suppliers for a number of specialized materials,
including silicon, necessary to manufacture our solar power products, we are susceptible to
supplier and industry-wide supply shortages and price volatility, which could adversely affect our
ability to meet existing and future customer demand for our products and cause us to make fewer
shipments, generate lower than anticipated revenues and manufacture our products at higher than
expected costs.
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Our dependence on a limited number of third party suppliers for raw materials, key components for
our solar power products and custom-built equipment for our operations could prevent us from
delivering our products to our customers within required timeframes, which could result in order
cancellations and loss of market share.
  We may fail to successfully bring to market our new solar power products under development, which
may prevent us from achieving increased sales and market share.
  Our solar power products may not gain market acceptance, which would prevent us from achieving
increased sales and market share.
  
    
    our failure to produce solar power products that compete favorably against other solar
power products on the basis of cost, quality and performance;
    
    our failure to produce solar power products that compete favorably against conventional
energy sources and alternative distributed generation technologies, such as wind and
biomass, on the basis of cost, quality and performance;
    
    whether or not customers will accept our new module designs under development and the
techniques we are developing to mount them; and
    
    our failure to develop and maintain successful relationships with distributors, systems
integrators and other resellers, as well as strategic partners.
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Technological changes in the solar power industry could render our solar power products
uncompetitive or obsolete, which could reduce our market share and cause our sales to decline.
  Our ability to increase market share and sales depends on our ability to successfully maintain our
existing distribution relationships and expand our distribution channels.
  We face risks associated with the marketing, distribution and sale of our solar power products
internationally, and if we are unable to effectively manage these risks, it could impair our
ability to expand our business abroad.
  
    
    difficult and expensive compliance with the commercial and legal requirements of
international markets, with which we have only limited experience;
    
    inability to obtain, maintain or enforce intellectual property rights;
    
    encountering trade barriers such as export requirements, tariffs, taxes and other
restrictions and expenses, which could affect the competitive pricing of our solar power
products and reduce our market share in some countries;
    
    fluctuations in currency exchange rates relative to the U.S. dollar;
    
    difficulty in recruiting and retaining individuals skilled in international business operations;
    
    increased costs associated with maintaining international marketing efforts;
    
    difficulty of enforcing revenue collection internationally; and
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##### Table of Contents




    
    inability to develop, manufacture, market and sell our products and services in German
and other international markets due to, for example, third-party intellectual property
rights.
   Our dependence on a small number of resellers may cause significant fluctuations or declines in our
product revenues.
  
    
    reduction, delay or cancellation of orders from one or more of our significant resellers;
    
    selection by one or more of our significant resellers of products competitive with ours;
    
    loss of one or more of our significant resellers and our failure to recruit additional or
replacement resellers; and
    
    failure of any of our significant resellers to make timely payment of our invoices.
 Problems with product quality or product performance may cause us to incur warranty expenses and
may damage our market reputation and prevent us from achieving increased sales and market share
particularly as we introduce new technologies such as Thin Ribbon and larger modules.
  Our success in the future may depend on our ability to establish and maintain strategic alliances,
and any failure on our part to establish and maintain such relationships would adversely affect our
market penetration and revenue growth.
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The success of our business depends on the continuing contributions of our key personnel and our
ability to attract and retain new qualified employees in a competitive labor market.
   We may be affected by skilled labor shortages and labor disputes.
  Extended business interruption at our manufacturing facilities could result in reduced sales.
  Because our business relies upon a variety of computer systems to operate effectively, the failure
or disruption of, or latent defects in these systems could have a material adverse effect on our
business.
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If we fail to maintain an effective system of internal control over financial reporting, we may not
be able to accurately report our financial results or prevent fraud. As a result, this could have a
material adverse effect on our business.
  Our management team may not be able to successfully implement our business strategies.
  The reduction or elimination of government subsidies and economic incentives for on-grid
applications could cause our revenues to decline.
  If solar power technology is not suitable for widespread adoption or sufficient demand for solar
power products does not develop or takes longer to develop than we anticipate, our sales would not
significantly increase and we would be unable to achieve or sustain profitability.
  
    
    cost-effectiveness of solar power technologies as compared with conventional and
non-solar alternative energy technologies;
 32




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
    
    performance and reliability of solar power products as compared with conventional and
non-solar alternative energy products;
    
    success of alternative distributed generation technologies such as fuel cells, wind power
and micro turbines;
    
    fluctuations in economic and market conditions that impact the viability of conventional
and non-solar alternative energy sources, such as increases or decreases in the prices of
oil and other fossil fuels;
    
    capital expenditures by customers that tend to decrease when the United States or global economy slows;
    
    continued deregulation of the electric power industry and broader energy industry; and
    
    availability of government subsidies and incentives.
 We face intense competition from other companies producing solar power and other energy generation
products. If we fail to compete effectively, we may be unable to increase our market share and
sales.
   If we are unable to protect our intellectual property adequately, we could lose our competitive
advantage in the solar power market.
  
    
    we cannot be certain that our pending United States and foreign patent applications will
result in issued patents or that the claims allowed are or will be sufficiently broad to
protect our technology or processes;
    
    given the costs of obtaining patent protection, we may choose not to protect certain
innovations that later turn out to be important;
    
    our license, but not our right, to practice the String Ribbon technology terminated upon
the expiration of the underlying patents, which occurred during 2003 and 2004, and our
historical operating experience with String Ribbon technology and our related patented and
proprietary manufacturing processes may not adequately protect our competitive advantage;
 33




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
    
    third parties may design around our patented technologies or seek to challenge or
invalidate our intellectual property rights and there is no assurance that our intellectual
property rights will deter infringement or misappropriation of our intellectual property;
    
    we may incur significant costs and diversion of management resources in prosecuting or
defending intellectual property infringement suits;
    
    we may not be successful in prosecuting or defending intellectual property infringement
suits and, as a result, may need to seek to obtain a license of the third partys
intellectual property rights, which may not be available to us, whether on reasonable terms
or at all;
    
    the contractual provisions we rely on to protect our trade secrets and proprietary
information, such as our confidentiality and non-disclosure agreements with our employees,
consultants and other third parties, may be breached and our trade secrets and proprietary
information may be disclosed to competitors, strategic partners and the public; and
    
    while our license to the underlying patents directed to the String Ribbon technology has
expired, we own 7 United States patents, 7 pending United States patent applications, 2
granted European patent applications that have enforceable rights in 10 foreign
jurisdictions and 19 pending foreign patent applications directed to various aspects of the
String Ribbon technology; however, our historical operating experience with String Ribbon
technology and our related patented and proprietary manufacturing processes may not
adequately protect our competitive advantage now that the licensed patents have expired.
 If we are subject to litigation and infringement claims, they could be costly and disrupt our
business.
    
    
    assert claims of infringement or misappropriation of or otherwise enforce our intellectual property rights;
    
    protect our trade secrets or know-how; or
    
    determine the enforceability, scope and validity of our intellectual property rights or those of others.
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We may be unable to adequately protect or enforce our proprietary information, which may result in
its unauthorized use or reduced sales or otherwise reduce our ability to compete.
    
    
    independently develop substantially equivalent proprietary information, products and techniques;
    
    otherwise gain access to our proprietary information; or
    
    design around our patents or other intellectual property.
  If the effective term of our patents is decreased due to changes in patent laws or if we need to
refile some of our patent applications, the value of our patent portfolio and the revenues we
derive from it may be decreased.
  International intellectual property protection is particularly uncertain and costly, and we have
not obtained or sought patent or trademark protection in many foreign countries where our solar
power products and services may be developed, manufactured, marketed or sold.
  Existing regulations and changes to such regulations may present technical, regulatory and economic
barriers to the purchase and use of solar power products, which may significantly reduce demand for
our products.
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Our reliance on government contracts to partially fund our research and development programs could
slow our ability to commercialize our solar power technologies and would increase our research and
development expenses.
   Compliance with environmental regulations can be expensive, and noncompliance with these
regulations may result in adverse publicity and potentially significant monetary damages and fines.
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Product liability claims against us could result in adverse publicity and potentially significant
monetary damages.
  Risks Related to Our Common Stock
 Substantial leverage and debt service obligations may adversely affect our cash flows.
  
    
    make it difficult for us to make payments on the notes;
    
    make it difficult for us to obtain financing for working capital, acquisitions
or other purposes on favorable terms, if at all, including financing to fund
the development or expansion of EverQs manufacturing operations;
    
    make us more vulnerable to industry downturns and competitive pressures; and
    
    limit our flexibility in planning for, or reacting to changes in, our business.
  The price of our common stock has been volatile.
   
    
    the size and timing of customer orders for or shipments of our products;
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
    
    the rate and cost at which we are able to expand our manufacturing capacity to meet
product demand, including the rate and cost at which we are able to implement advances
in our String-Ribbon technology;
    
    our ability to establish and expand key customer and distributor relationships;
    
    our ability and the terms upon which we are able to raise capital sufficient to
finance the expansion of our manufacturing capacity and our sales and marketing
efforts;
    
    our ability to expand EverQ within budget and within the time frame that we expect;
    
    the extent to which Q-Cells and REC increase their ownership in EverQ in the future
and thereby reduces our share of profits and losses of EverQ in future periods;
    
    the extent to which any change in the capital structure of EverQ in the future
causes us to be unable to consolidate EverQs financial results;
    
    our ability to establish strategic relationships with third parties to accelerate
our growth plans;
    
    the amount and timing of expenses associated with our research and development
programs and our ability to develop enhancements to our manufacturing processes and our
products;
    
    delays associated with the supply of specialized materials necessary for the
manufacture of our solar power products;
    
    our ability to execute our cost reduction programs;
    
    one time charges resulting from replacing existing equipment or technology with new
or improved equipment or technology as part of our strategy to expand our manufacturing
capacity and to decrease our per unit manufacturing cost;
    
    developments in the competitive environment, including the introduction of new
products or technological advancements by our competitors; and
    
    the timing of adding the personnel necessary to execute our growth plan.
   Because we do not intend to pay dividends, stockholders will benefit from an investment in our
common stock only if it appreciates in value.
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We are subject to anti-takeover provisions in our charter and by-laws and under Delaware law that
could delay or prevent an acquisition of our company, even if the acquisition would be beneficial
to our stockholders.
  We can issue shares of preferred stock that may adversely affect the rights of a stockholder of our
common stock.
  
    
    adversely affect the voting power of the stockholders of our common stock;
    
    make it more difficult for a third party to gain control of us;
    
    discourage bids for our common stock at a premium;
    
    limit or eliminate any payments that the stockholders of our common stock could expect to
receive upon our liquidation; or
    
    otherwise adversely affect the market price of our common stock.
  
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 ITEM 5. OTHER INFORMATION
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ITEM 6. EXHIBITS
 Number
    
    Description1.1 (1)
    
    Underwriting Agreement dated as of February 3, 2005, by and among the Company,
SG Cowen & Co., LLC and First Albany Capital Inc. (Exhibit 1.1)3.1 (2)
    
    Third Amended and Restated Certificate of Incorporation. (Exhibit 3.2)3.2 (2)
    
    Second Amended and Restated By-laws. (Exhibit 3.4)3.3 (3)
    
    Certificate of Amendment of Third Amended and Restated Certificate of
Incorporation filed with the Secretary of State of the State of Delaware on
May 15, 2003. (Exhibit 4.3)3.4 (3)
    
    Certificate of the Powers, Designations, Preferences and Rights of the Series
A Convertible Preferred Stock of the Company. (Exhibit 4.4)3.5 (4)
    
    Certificate of Amendment of Third Amended and Restated Certificate of
Incorporation filed with the Secretary of State of the State of Delaware on
August 20, 2004. (Exhibit 4.5)4.1 (5)
    
    Indenture, dated as of June 29, 2005, between the Registrant and U.S. Bank
National Association, as Trustee. (Exhibit 4.4)4.2 (5)
    
    Form of 4.375% Convertible Subordinated Notes due 2012. (Exhibit 4.4)10.1 (2)*
    
    1994 Stock Option Plan. (Exhibit 10.1)10.2 (2)*
    
    2000 Stock Option and Incentive Plan. (Exhibit 10.2)10.3 (6)*
    
    Amended and Restated 2000 Stock Option and Incentive Plan. (Exhibit 99.1)10.4 (6)*
    
    Amended and Restated 2000 Employee Stock Purchase Plan. (Exhibit 99.2)10.5 (2)
    
    Lease Agreement between the Company and W9/TIB Real Estate Limited Partnership
dated as of January 31, 2000, as amended. (Exhibit 10.5)10.6 (2)+
    
    Agreement between the Company and Emanuel M. Sachs dated as of September 30,
1994, as amended. (Exhibit 10.7)10.7 (2)
    
    Series D Preferred Stock Purchase Agreement dated as of December 28, 1999.
(Exhibit 10.8)10.8 (2)
    
    Form of Indemnification Agreement between the Company and each of its
directors and executive officers. (Exhibit 10.9)10.9 (7)
    
    Stock and Warrant Purchase Agreement dated as of March 21, 2003. (Exhibit 10.1)10.10 (7)
    
    Form of Registration Rights Agreement. (Exhibit 10.3)10.11 (7)
    
    Voting Agreement dated as of March 21, 2003. (Exhibit 10.2)10.12 (8)
    
    Stock and Warrant Purchase Agreement dated June 16, 2004. (Exhibit 10.1)10.13 (8)
    
    Warrant Agreement dated June 21, 2004. (Exhibit 10.2)10.14 (8)
    
    Form of Warrants. (Exhibit 10.3)10.15 (8)
    
    Registration Rights Agreement dated June 21, 2004. (Exhibit 10.4)
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##### Table of Contents



Number
    
    Description10.16 (8)
    
    Conversion, Consent, Voting and Lock-Up Agreement dated June 21, 2004.
(Exhibit 10.5)10.17 (9)++
    
    Master Joint Venture Agreement entered into as of November 4, 2005 by and
among the Company, Q-Cells AG, Renewable Energy Corporation and EverQ GmbH.
(Exhibit 10.17)10.18 (9)++
    
    License and Technology Transfer Agreement by and between the Company and EverQ
GmbH, dated November 24, 2005. (Exhibit 10.18)10.19 (9)++
    
    Technology Co-Operation Agreement by and between Renewable Energy Corporation
and the Company dated November 24, 2005. (Exhibit 10.19)10.20 (9)++
    
    Supply Agreement, dated November 24, 2005, by and between Solar Grade Silicon
LLC and the Company. (Exhibit 10.20)10.21 (9)++
    
    Supply Agreement, dated November 24, 2005, by and between Solar Grade Silicon
LLC and EverQ GmbH. (Exhibit 10.21)10.22 (10)*
    
    Evergreen Solar, Inc. Management Incentive Policy. (Exhibit 10.20)10.23 (11)
    
    Purchase Agreement, dated
June 23, 2005 between the Company and SG Cowen & Co., LLC, as representatives of the Initial Purchasers. (Exhibit 10.24)10.24 (5)
    
    Registration Rights Agreement, dated June 29, 2005, between the Company and SG
Cowen & Co., LLC, as representative of the Initial Purchasers. (Exhibit 10.21)10.25 (12)++
    
    Memorandum of Understanding, dated June 5, 2006, by and among Evergreen Solar,
Inc., Q-Cells AG, EverQ GmbH and Renewable Energy Corporation AS. (Exhibit
10.1)31.1
    
    Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) and
Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) and
Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Certification of Chief Executive Officer Pursuant to 18 U.S.C. 1350, as
adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification of Chief Financial Officer Pursuant to 18 U.S.C. 1350, as
adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 +
    
    Confidential treatment granted as to certain portions.++
    
    Confidential treatment requested as to certain portions.*
    
    Indicates a management contract or compensatory plan, contract or arrangement.(1)
    
    Incorporated herein by reference to the exhibits to the Companys
Current Report on Form 8-K dated February 3, 2005 (File No.
000-31687). The number given in parenthesis indicates the
corresponding exhibit number in such Form 8-K.(2)
    
    Incorporated herein by reference to the exhibits to the Companys
Registration Statement on Form S-1, as amended (File No. 333-43140).
The number given in parenthesis indicates the corresponding exhibit
number in such Form S-1.(3)
    
    Incorporated herein by reference to the exhibits to the Companys
Registration Statement on Form S-8 dated June 9, 2003, as amended
(File No. 333-105963). The number given in parenthesis indicates the
corresponding exhibit number in such Form S-8.(4)
    
    Incorporated herein by reference to the exhibits to the Companys
Registration Statement on Form S-3 filed on October 21, 2004 (File
No. 333-119864). The number given in parenthesis indicates the
corresponding exhibit number in such Form S-3.(5)
    
    Incorporated herein by reference to the exhibits to the Companys
Current Report on Form 8-K dated June 29, 2005 (File No. 000-31687).
The number given in parenthesis indicates the corresponding exhibit
number in such Form 8-K.(6)
    
    Incorporated herein by reference to the exhibits to the Companys
Current Report on Form 8-K dated July 15, 41




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##### Table of Contents



2005 (File No. 000-31687).
The number given in parenthesis indicates the corresponding exhibit
number in such Form 8-K.(7)
    
    Incorporated herein by reference to the exhibits to the Companys
Current Report on Form 8-K dated March 24, 2003 (File No. 000-31687).
The number given in parenthesis indicates the corresponding exhibit
number in such Form 8-K.(8)
    
    Incorporated herein by reference to the exhibits to the Companys
Current Report on Form 8-K dated June 21, 2004 (File No. 000-31687).
The number given in parenthesis indicates the corresponding exhibit
number in such Form 8-K.(9)
    
    Incorporated herein by reference to the exhibits to the Companys
Annual Report on Form 10-K dated March 16, 2006 (File No. 000-31687).
The number given in parenthesis indicates the corresponding exhibit
number in such Form 10-K.(10)
    
    Incorporated herein by reference to the exhibits to the Companys
Quarterly Report on Form 10-Q for the period ended April 2, 2005
filed on May 2, 2005. The number given in parenthesis indicates the
corresponding exhibit number in such Form 10-Q.(11)
    
    Incorporated herein by reference to the exhibits to the Companys
Quarterly Report on Form 10-Q for the period ending July 2, 2005
filed on August 11, 2005. The number given in parenthesis indicates
the corresponding exhibit number in such Form 10-Q.(12)
    
    Incorporated herein by reference to the exhibits to the Companys
Current Report on Form 8-K dated June 5, 2006 (File No. 000-31687).
The number given in parenthesis indicates the corresponding exhibit
number in such Form 8-K. 42




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##### Table of Contents



SIGNATURES
  EVERGREEN SOLAR, INC.Date: August 9, 2006/s/ Donald M. MuirDonald M. MuirChief Financial Officer, Vice President,Treasurer and Secretary(Principal Financial Officer)
 43