(Evergreen Solar plant closure story updated for analyst commentary, plant closure details)NEW YORK ( TheStreet) -- Evergreen Solar ( ESLR) announced after the close on Tuesday that it was closing down its Devens, Massachusetts solar manufacturing plant. While the handwriting may have been on the wall that all was not well in Devens, ever since Evergreen Solar decided to move a large portion of its wafer manufacturing to China, the reasons behind the Evergreen shutdown may be a negative data point for the entire solar sector. Evergreen Solar said in a statement, "Although production costs at our Devens facility have steadily decreased, and are now below originally planned levels and lower than most western manufacturers, they are still much higher than those of our low cost competitors in China. We have consistently stated during quarterly conference calls throughout 2010 that we would continue to manufacture in Devens as long as it was economically feasible. During the month of December, we experienced a 10% decrease in average selling prices from the beginning of the fourth quarter. As industry selling prices continue their rapid declines into 2011, panel manufacturing in Devens, either fully or partially, is no longer economically feasible." While the fact that Evergreen was falling behind the Chinese manufacturers in solar was long ago a given -- and precipitated the company's move to China -- solar analysts read the Evergreen move as another negative data point about pricing pressure across the solar module market at the outset of 2011. Sam Dubinsky, analyst at Wells Fargo, wrote in a note on Tuesday afternoon that the Evergreen Solar plant shuttering was the beginning of the industry shakeout in 2011, a process that will favor low-cost Chinese module leaders like Trina Solar ( TSL) and Yingli Green Energy ( YGE) as a loose supply and demand dynamic takes hold. The recent ASP declines were "the final straw" for Evergreen, and it's a sign of what's going on throughout the solar industry, according to some analysts. LDK Solar ( LDK) released an aggressive expansion plan, shipment guidance and revenue target for 2011 on Monday, leading to a big rally for solar.
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