Will Evergreen Solar (ESLR) ever recover?

Earlier this year, oil prices had escalated to all time highs, leading President Bush to make a statement that consumers should start looking into 'alternative sources of energy'. For once, I think everyone in the country was in agreement. Investors poured money in as if Alternative energy companies were selling crack cocaine.

In May, short term investors realized that Alternative energy companies would not be profitable for a few more years. The PowerShares WilderHill Clean Energy exchange-traded fund (PBW), which is comprised of companies that focus on greener and renewable sources of energy and technologies facilitating cleaner energy, fell almost 30%, from $24 down to the current $17 range.

Evergreen Solar, Inc. (ESLR) is one of the many alternative energy stocks that comprise the Clean Energy exchange-traded fund. In May 2006, shares traded for just over $17. However investors have lost their love for ESLR, and the stock has fallen 50% since the summer.

There are a lot of reasons why shares today trade in the $9 range. I won't site them all here, but I think the main reasons are lack of Earnings, the Poly-Silicon supply shortage, and a general bail-out of Alternative Energy Stocks. Evergreen has to convince investors that they will become a profitable company. Until they do, it's going to be a tough sell. America is not as passionate as Germany is about Solar energy and until we embrace our alternative energy companies, investors will stay on the sidelines.

I think analysts and investors have forgotten why Evergreen Solar is such a good company, and not just another alternative energy play.

1) The Polysilicon supply shortage is nearing the end. If you're not a believer, take a look at Evergreen's website, where you can see images of the Ever-Q factory manufacturing their string ribbon technology solar cells in The Matrix-like fashion.