Evergreen Solar (Nasdaq: ESLR), a Marlboro, Mass.-based maker of solar power products, has taken a hit on its stock price lately, but that doesn't mean things are all bad for the company.

Thomas Weisel Partners analyst Jeff Osborne, who recently moved over from CIBC World Markets, downgraded Evergreen on July 16th, concerned that the company didn't have as good a polysilicon supply as its competitors.

But there is light at the end of the tunnel, said Osborne, an opinion he reiterated today after going through the company's better than expected second quarter report.

Osborne sees a hard road over the next 12 to 18 months, predicting another dilutive financing round, but he said the company could be an acquisition target at some point and that he sees a "solid future for the company" for investors willing to take a longer-term view on the sector.

That silver lining in his report may have been missed by the market.

Evergreen dropped to $9.92 per share, down from $10.36, the day of his initial report.

Today, Evergreen's shares, which closed at $8.37 yesterday, were hovering at $8.07 in midday trading.

Evergreen claims to not need that much silicon for its String Ribbon process, which uses a proprietary crystalline technology, but apparent reaction to the downgrade continues.

That, despite silicon supply agreements, old and new.

In April, South Korean silicon maker DC Chemical made a deal to supply Evergreen with polysilicon beginning in late 2008 and continuing through 2014 (see Cleantech.com's Evergreen Day).

And earlier this week, the company signed a deal with Germany's Wacker for delivery of silicon in 2010.

The company has even hinted it's close to closing a deal with Nitol in Russia for the delivery of silicon in 2009.

Evergreen says it believes that these contracts will give it approximately 70% of the silicon required for its stated goal of 500 MW by 2012

Yesterday, the company reported second quarter losses per share of 9-cents, better than the 11-cents consensus estimates.

But that was offset by a worse-than-expected gross margin due to start up costs at the new EverQ factory and Quad Ribbon furnace technology development.

Thomas Weisel's Osborne said in his report that, "Despite the solid quarter, profits continue to be elusive and management noted it will likely need to raise additional capital in 2008."

Management was upbeat on the conference call about the state of the solar market, in particular trends in Germany, Spain and Greece.

The solar panel maker has already begun production at its second EverQ plant, part of a joint venture with German companies Q-Cells and Renewable Energy.

"We expect the second facility to achieve its maximum annual capacity of 60 MW by the end of 2007, bringing EverQ's total capacity to approximately 100 MW," said Feldt.

Some of Evergreen's competitors are no doubt equally upbeat about expanding to meet market demand.

Last week, the U.K. energy giant BP (NYSE: BP) said it would spend an additional $27 million on a previously announced expansion of its solar-cell manufacturing plant in Maryland to prepare for future growth.

And Kyocera Solar, the Arizona unit of Japan's Kyocera Group (NYSE: KYO), said in May that it would build a new, 223,000 square foot manufacturing facility for solar modules in Mexico.

The new plant will more than quadruple Kyocera's production capacity there, up from 35 MW per year to 150 MW by the end of March 2011.

There are no lack of competitors.

But if Evergreen can convince investors that its silicon supply is on track, and that its technology is more efficient, things could look green in the long-term.