BP might be investing left and right in wind farms in the US but when itcomes to solar cell and wafer manufacturing, the wind has gone out ofthis business’ sail because of material pricing woes.
BP announced lastweek that it will shutdown its solar manufacturing facility inFrederick, Maryland, and sad as it may be, this move makes financialsense given the fact that more cheaper materials are being manufacturedin places such as China and even India.
Fresh from a recent trip hosted by polysilicon manufacturer WackerChemie, I was able to get a small glimpse of how the solar materialsmarket is currently going through and like BP, Wacker had to sell itsstake in a solar wafer manufacturing joint venture Wacker Schott Solar GmbH in October last year because of continuous poormarket conditions.
I’ll post more about Wacker later but in the meantime, BP said theFrederick facility will ceased its silicon casting, wafering, and cellmanufacturing although sales and marketing, research and technology,project development, as well as key business support activities willcontinue. 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 morecost-competitive to its customers.
"Solar prices declined between 40 and 50 percent since the onset ofthe financial and economic crisis, compressing industry margins anddriving solar power towards grid competitive pricing," said ReyadFezzani, CEO of BP Solar. "By shifting our supply to a high quality,low cost supply base to serve both distribution customers and largescale projects, we have strengthened our position as a provider ofcompetitive solar solutions with our offer of the highest lifetimevalue."
BP said it has reduced its unit costs by morethan 45% since closing several other high cost manufacturing locationsthat began in first quarter of 2009.