BP To Shut Australian Solar Panel Factory

By Ross Kelly
Of DOW JONES NEWSWIRES

SYDNEY (Dow Jones)--BP PLC (BP) said Tuesday it is shutting down its only Australian-based solar power factory, resulting in 200 job losses, to focus production in countries where costs are lower.
Australia's largest manufacturer of solar panels, BP said its local marketing team will keep their jobs to distribute imported product to Australian customers.
The move comes against a backdrop of increased public enthusiasm for renewable energy sources, with the Australian federal government last year setting a 20% renewable energy target for 2020.
The government, however, upset the solar power industry in May when it said a previously announced A$8,000 rebate would no longer be available to households earnings more than A$100,000 a year.
BP Solar regional director Mark Twiddel said the company's decision to cease manufacturing in Australia had nothing to do with government policy and hadn't been prompted by the global financial crisis.
"In order to compete, in order to lower the cost of solar electric products, we need to be located at places closer to our suppliers where we can operate at scale," he told reporters during a conference call.
Twiddel said the Australian operation was competing with plants 20-times its size and had to import most of its raw materials, predominately silicon wafers, before shipping the bulk of product offshore.
The U.K energy giant will stop producing solar photovoltaic power, or PV, cells at the plant in Sydney Olympic Park at the end of March, with the slack to be taken up at its operations in Spain, India, China and the U.S.
The cells produced at the Australian operation can generate about 50 megawatts of power a year, accounting for a sixth of BP's total annual global PV output of 300 megawatts.
Twiddel said BP has set a target to make solar power prices competitive with current wholesale electricity prices across its global operations within five to 10 years.
BP Tuesday also reiterated that it is investing about US$1.5 billion globally each year in alternative energy sources.
Last year, it commenced an expansion of its PV manufacturing capacity at its European headquarters in Madrid, and at its Indian solar joint venture, Tata BP Solar, in Bangalore.
Twiddel said those expansions were progressing to plan.
-By Ross Kelly, Dow Jones Newswires; 61-2-8235-2957; ross.kelly@dowjones.com