BP might be investing left and right in wind farms in the US but when it comes to solar cell and wafer manufacturing, the wind has gone out of this business' sail because of material pricing woes.
BP announced last week that it will shutdown its solar manufacturing facility in Frederick, Maryland, and sad as it may be, this move makes financial sense given the fact that more cheaper materials are being manufactured in places such as China and even India.
Fresh from a recent trip hosted by polysilicon manufacturer Wacker Chemie, I was able to get a small glimpse of how the solar materials market is currently going through and like BP, Wacker had to sell its stake in a solar wafer manufacturing joint venture Wacker Schott Solar GmbH in October last year because of continuous poor market conditions.
I'll post more about Wacker later but in the meantime, BP said the Frederick facility will ceased its silicon casting, wafering, and cell manufacturing although sales and marketing, research and technology, project development, as well as key business support activities will continue. 320 positions will be eliminated out of 430 at the plant.
BP said it will shift its remaining in-house manufacturing to its low cost joint ventures and regional supply partners to be more cost-competitive to its customers.
"Solar prices declined between 40 and 50 percent since the onset of the financial and economic crisis, compressing industry margins and driving solar power towards grid competitive pricing," said Reyad Fezzani, CEO of BP Solar. "By shifting our supply to a high quality, low cost supply base to serve both distribution customers and large scale projects, we have strengthened our position as a provider of competitive solar solutions with our offer of the highest lifetime value."BP said it has reduced its unit costs by more than 45% since closing several other high cost manufacturing locations that began in first quarter of 2009.
[Photo from Frederick News Post]