BP Quits Solar Business

on December 21, 2011 at 11:26 AM

BP has confirmed it will be closing down operations of 40-year-old BP Solar.

BP Solar has been struggling for the last few years as international competition caused prices of photovoltaic (PV) panels to plummet. By 2008 and 2009, the company’s international fossil fuel parent moved most of its manufacturing operations to China and India, shutting down factories across Europe and laying off some 1,500 employees.

But as global competition pushed prices down even further, BP realized operations-as-usual were not viable. This July, BP Solar shut down its residential rooftop and sales business, concentrating only on large utility-scale projects, BP spokesman Robert Wine told Breaking Energy. But even that has now became too expensive to keep.

For more on how oil majors have shifted their renewable energy strategies in recent years, read “Beyond Incentives.”

“So we’ve taken the decision, after many years, simply to close everything down and simply no longer be in the photovoltaics,” Wine said.

Since 2005, BP has invested more than $7 billion in BP Renewables, the larger business within which the solar division operated. The company has the goal of spending another billion dollars by 2015, a goal which Wine said will probably be reached early. The remaining cash will be invested in wind and biofuels, both of which produce power on a larger scale than solar panels, Wine said.

Wine said that government policy shifts, including the withdrawal of feed-in-tariffs in Europe, are also to blame for BP Solar’s shutdown. He said BP Solar has tried manufacturing with elements other than its current silicon-based cells, with products like polycrystalline, but none has proven viable.

The question is, Wine said, how cheaply are you willing to supply the panels?

For BP, the equation was no longer cost-effective. All of the remaining BP Solar employees–around 100 of them in Spain and in the United States–will be laid-off.

“It was a difficult decision,” Wine said, but we “got to the point where there was no other decision to be taken.”