BP Closes U.S. Solar Panel Plant, Relocates Green Collar Jobs To China and India [UPDATE]

BP is closing a 40-megawatt photovoltaic manufacturing plant in Frederick, Md., which opened just three years ago amidst fanfare that it would herald a new breed of green collar jobs. Instead, about 320 workers are expected to loose their jobs — see full press release.

With the price of silicon PV panels having fallen by more than 50 percent over the past year, it’s become expensive  to produce in the U.S.

BP Solar says it’s relocating most of the Maryland production to ventures in China and India: BP SunOasis and BP Tata Solar, respectively, a company spokesman tells us.

BP Solar says it’s committed to the U.S. cleantech market, noting that cutting costs, will ensure that more customers can afford their products.

On Friday BP Chief Executive Tony Hayward told the Washington Post that it  “remained absolutely committed to solar.”  He added: “BP was moving to where we can manufacture cheaply.”

A year ago BP laid off 140 workers at its Frederick plant, at the time blaming the job cuts on the poor economy.

Could the BP plant closure short circuit President Obama’s quest for a green collar economy? BP says no and that cutting costs will actually create more jobs downstream, including panel installation and maintenance and marketing.

U.S. cleantech companies says they can’t open and operate solar panel or wind turbine plants without government backing and as such have  been pressing for more financial support, including extending the popular manufacturing cleantech tax credit.

While BP (as well as Massachusetts EverGreen Solar) are relocating to cheaper locales, some companies have opted to open production lines in the U.S., along with China, one of the world’s fastest growing cleantech market. They include: Yingli Solar of China, Germany’s Schott Solar and Kyocera Solar of Japan.

Update: A  BP spokesman says the company is not walking away from its cleantech business, highliting that over the past four years the British oil company has invested $4 billion in its alternative energy business and plans to invest more than $1 billion this year.

Specifically, regarding its solar business BP seeks  to grow solar module sales in the U.S.  by 50 percent this year. “We are positioning BP Solar to be able to meet that growing demand through low cost, high quality, high volume manufacturing agreements,” the BP spokesman tells G.E.R. — scroll down to read the full Q&A.

Q&A

– Why is BP shutting down the Maryland plant, are you planning to shift production to a cheaper locale, Where?

We have worked for some time to reduce cost and create efficiencies that would keep our Frederick plant competitive. However, the competitive environment for solar products is intense, with prices for solar modules dropping 50 percent in the past 18 months Our employees here have worked very hard to improve the plant’s competitive position, but the market is just moving too fast – and we can no longer maintain production here.

Our strategy is to source product from our joint venture companies in India and China, as well as high volume, high quality regional third party suppliers in Europe and Mexico.

– The impression is that BP is refocusing on its core oil and gas business at the expense of cleantech, is that an accurate assessment?

Hardly. BP has invested more than $4 billion in the alternative energy space over the past four years or so, and we intend to invest in excess of $1 billion in 2010. That is a huge investment in the segment. (For BP, these investments include wind, solar, biofuels, and carbon capture & sequestration.) Specifically on solar, we intend to grow solar module sales in the US by 50 percent this year. Solar is moving toward grid parity and prices are clearly dropping rapidly, which should make solar power more attractive for businesses and homeowners. We are positioning BP Solar to be able to meet that growing demand through low cost, high quality, high volume manufacturing agreements.

– In terms of capex how much is going to cleantech for the 2010 -2011 period, how does it compare to the 2009 – 2010 period?

Investment plans for 2010 are similar to last year – a little over $1 billion in our alternative energy businesses.

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