Energy group says it 'can't make any money' from selling panels despite spending $20bn annually on oil and gas developments
BP has taken the axe to its solar power business, saying it "can't make any money" from selling panels at a time when it continues to spend $20bn annually on oil and gas developments.
The energy group, which once promised to move "beyond petroleum", was an important player in solar but has over the last three years gradually closed its panel factories and made around 1,750 workers redundant.
At the same time, the company has gradually retreated from other areas such as carbon capture and storage and shut down its separate London headquarters for BP Alternative Energy.
Mike Petrucci, chief executive of BP Solar, wrote to his remaining 100 staff last week, saying "the continuing global economic challenges have significantly impacted the solar industry, making it difficult to sustain long-term returns for the company."
A spokesman for the wider group said the plunging value worldwide of solar panels – partly as a result of low-cost competition from China – had convinced BP that it had no future in a "commoditised" business.
But the spokesman said BP was fulfilling its previous commitment to spend $8bn on renewable power up to the year 2015 and was continuing to forge ahead with onshore wind in the US and biofuels worldwide.
The BP move comes alongside major trouble for other Western solar companies. Panel maker Solyndra, has sought protection from its creditors in the US despite receiving $500m of subsidies from the government, and Solon of Germany is filing for insolvency.
Governments in Britain, Spain and elsewhere have been cutting their financial support for solar power as the price of equipment has tumbled. A recent Ernst & Young report predicted solar prices would have halved by 2013 on the levels of 2009.