BP axes 620 jobs from solar business

Petrochemical company blames cuts on financial crisis, but claims reduction in workforce will lead to cheaper solar power

Terry Macalister
guardian.co.uk, Wednesday 1 April 2009 11.46 BST

BP is to axe 620 jobs from its solar power business – more than a quarter of that workforce – in a move it said was part of the long-term strategy to "reduce the cost of solar power to that of conventional electricity."
Two cell manufacture and module assembly plants near Madrid, will be shut with the loss of 480 posts while module assembly will also be phased out at its Frederick facility in Maryland, US, with a further 140 redundancies.
BP blamed the cutbacks on the credit crunch and lower-cost competition saying its global manufacturing capacity would still increase during this year and next via a series of strategic alliances with other companies.
"We deeply regret the impact of this business decision on our employees and the local communities," said Reyad Fezzani, chief executive of BP Solar. "We have a long history at both the Madrid and Frederick sites. Competitive hi-tech manufacturing of ingots, wafers and cells will continue at Frederick. Engineering, technology product development, sales and marketing and other business support functions will also remain at both Frederick and Madrid."
He said solar markets had been "unsettled by the impact of the global economic environment", adding that the market had been over-supplied as competition increased and prices had fallen.
Fezzani said the cuts would lead to lower prices for solar power: "The decision is part of the long term strategy to reduce the cost of solar power to that of conventional electricity."
The decision by a cash-rich oil group to reduce its direct manufacturing capacity and cut 620 out of 2,200 jobs will raise further questions about whether BP is retreating back to its core hydrocarbon business despite marketing promises to go "beyond petroleum." The London-based company said last year it was going to concentrate its alternative energy business on wind and solar in the US, while rival Shell has also been cutting back.
The moves will also send further shock waves through the wider renewable energy sector which is reeling from a retreat by the banks from higher risk investments such as green power schemes.
Andrew Mill, who sits on the UK government's Renewables Advisory Board, told the Guardian 10 days ago that the renewables sector was heading for crisis and British ministers' climate change targets would not be met. "The government has done a lot in terms of policies and targets, but the reality is that it was always going to take a lot of money to make it happen. And that money is not coming through quickly enough."
The UK is a relatively small solar market and will rely largely on wind to meet its goal of producing 15% of its energy from renewables by 2020.