UPDATE 1-Evergreen Solar closing Massachusetts factory

* Closing of Devens, Mass. plant will affect 800 jobs

* Company to record non-cash charges of $340 mln

* CEO says U.S. at manufacturing disadvantage vs. China

LOS ANGELES, Jan 11 (Reuters) - U.S. solar company Evergreen Solar Inc ESLRD.O said it would close its Devens, Massachusetts factory to preserve cash as it faces stiff competition from Chinese rivals.

The facility will shut down by the end of the first quarter, affecting 800 employees, Evergreen said.

The company will record non-cash charges in the fourth and first quarters of $340 million to write off the building and its equipment. It is also reviewing $150 million of prepayments associated with silicon contracts to determine whether additional charges are required.

Evergreen said increases in solar panel production in low-cost regions such as China combined with reductions in government subsidies in key European markets would pressure prices throughout this year. Evergreen's average selling prices dropped 10 percent in December.

"The United States will continue to be at a disadvantage from a manufacturing standpoint," Evergreen Chief Executive Michael El-Hillow said in a statement. (Reporting by Nichola Groom; editing by Carol Bishopric)