Greenwire: BP PLC on Friday said it will close its solar-panel manufacturing plant in Frederick, Md., marking the final step in the company’s effort to move its solar business out of the United States to facilities in China, India and other countries.
Less than four years ago, BP rolled out a $70 million strategy to double output at the solar manufacturing facility and erected a building to house the production lines. But BP Chief Executive Tony Hayward said the company is now planning to move its solar operations to “where we can manufacture cheaply,” noting that the company remains “absolutely committed to solar.”
The cost-cutting move will lead to 320 workers being laid off, the company said, noting it will keep 100 people involved in research, sales and project development. By closing high-cost manufacturing locations, the company says it will curb its costs by more than 45 percent.
Hayward blames intense competition and high silicon prices on what has made the solar sector “a very challenging business.” BP Solar chief executive, Reyard Fezzani, said the U.S. market for solar was almost flat in 2009, with solar module prices dropping about 50 percent.
The company also had continued to produce 125 millimeter multi-crystalline solar cells in Frederick while the rest of the industry had moved to 156 millimeter cells, which have become standard. Changing the production lines would be too expensive, Fezzani said.
BP will continue to rely on a joint venture with Tata in Bangalore, India, and another joint venture in Xian, China, with a Chinese firm called SunOasis for its solar business. It has also applied to the Energy Department to help finance a proposed 32 megawatt solar-power generation plant on Long Island, N.Y., on land belonging to the Energy Department’s Brookhaven National Laboratory (Steven Mufson, Washington Post, March 27). – DFM