The facilities will be based in Shanghai, China and Billerica, Massachusetts, BTU said, adding that it aims to double the size of its solar business in 2008 and 2009.

"The increasing use of solar power as a clean, renewable energy source provides an excellent opportunity for us to grow our solar equipment business," BTU Chairman and Chief Executive Paul van der Wansem said in a statement.

John McCaffrey, who has worked with solar companies DayStar Technologies Inc., Q-Cells and Evergreen Solar will lead the alternative energy unit's engineering and product development, BTU said.

Douglas Lawson, formerly senior vice president of marketing and strategic business development at PRI Automation, will be in charge of marketing and business development for BTU's new alternative energy unit.

Separately Tuesday, BTU said fourth-quarter net income was $600,000, or 6 cents per share, compared with $1 million, or 11 cents per share, a year ago.

The company said a higher tax rate at one of its overseas units reduced the latest quarter's earnings per share by 4 cents.

Net sales were $18.3 million, up 10 percent from the previous year.

BTU said the creation of the alternative energy business group, as well as investments in technology and new products, would weigh on its bottom line in the near term.

For the first quarter, BTU said it expects to be "marginally profitable." It forecast sales of $15.8 million to $16.8 million.

(Reporting by Nichola Groom. editing by Gunna Dickson)