Contrary to its tagline of the early 2000s of going â€œBeyond Petroleumâ€, British Oil giant BP has decided to shut down BP Solar, its solar energy unit. The company claims that solar energy is not profitable and that it will focus on wind energy and biofuels instead.
Admittedly, BPâ€™s decision does not come as a complete shock, as it has been scaling down its solar energy operations for the past few years.
Back in 2009, BP halted most of its solar manufacturing operations, cutting jobs at solar plants in Maryland and Madrid. At the time, the company claimed the cuts were necessary to reduce costs and consolidate its global manufacturing operations.
Then last July, BP decided to stop solar operations in Maryland entirely, closing down its plant in Frederick and laying off 80 employees.
Closing down its solar energy unit is merely the culmination of its move away from the sector. It will sell its stakes in over 158 megawatts of projects in Italy, Germany, Spain, Britain, and the US. The only projects it will keep are with Tata Power in India and an Australian consortium that received government funding to build the Moree solar farm earlier this year.
Already, the solar manufacturing industry has been plagued by bankruptcies from Solyndra in the US and Solar Millennium in Germany. The bankruptcies were mostly caused by dropping solar panel prices and increasing competition from China.
However, despite these high-profile bankruptcies, many major players have been increasing their solar investments, leaving some experts to question BPâ€™s recent decision.
For instance, the legendary investor Waren Buffett has just launched a new foray into solar power with two new projects in California and Arizona. And Paul Leming, an analyst from the Ticonderoga Securities LLC, told Bloomberg News that â€œtwo of the biggest oil companies have taken the opposite approaches. The move toward alternative energy continues to be a well-recognized megatrend.â€
Do you think BP is correct in its assessment of the solar industry? Do you think it has abandoned its efforts to move â€œbeyond petroleumâ€?
Image CC licensed by Heather Harvey