BP Exit Solar Market as Industry Margins Evaporate

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"BP Solar announced that it will end its activities in the PV market today, citing it being 'difficult to sustain long-term returns for the company'.

BP’s decision is a clear indicator of the challenges that PV module suppliers face in remaining profitable in the current industry conditions. PV module manufacturing capacity has hit 50 GW this year, despite demand reaching just 24 GW. The resulting oversupply has put huge pressure on prices, and average prices are now 44% lower than they were one year ago. Average gross margins are now in the single digits, and most suppliers are making net-losses on their operations.

Recent high-profile solar investment announcements from the likes of Google and Warren Buffet’s MidAmerican Energy may seem to contradict the move from one of the World’s largest Energy companies. However, these recent investments have all been further downstream in financing large utility-scale systems. These investment cases are very different to operating as a module supplier in today’s climate and so are not likely to be affected by BP, or other suppliers’ departures from the industry."

http://imsresearch.com/blog/BP_Exit_Solar_Market_as_Industry_Margins_Evaporate/128

[Bob Wallace]

1. BP blew it...

They had the technology in house for several years that would have allowed them to produce panels much cheaper than what they were turning out. During that time Chinese companies figured out how to pull down costs using a similar approach and cut the market out from under BP.

This is not BP's first exit from the solar business, if I remember correctly. Seems like they got out and then got back in a few years back.

Tata Power is buying out BP Solar in India.

http://www.dealcurry.com/2012012-Tata-Power-To-BuyOut-BP-s-Stake-In-JV.htm

[txlibdem]

2. I really don't believe an Oil Company would ever actually try to make solar cheaper / more available

I see it more like the so-called "conspiracies" of car companies buying up 100 mpg carburetor inventions so they could bury them.

[Bob Wallace]

3. That's fine...

Then you probably won't believe that Chevron is the largest geothermal electricity provider in the world either....

[OKIsItJustMe]

4. Too much energy is wasted worrying about “conspiracies”

BP (like virtually any commercial corporation) is primarily interested in making money, and more and more, making money in the short term. The oil business is a big/fast money maker for them. Solar is not…