Sun sets on BP’s solar hopes

By Ed Crooks, Energy Editor
Published: May 13 2009 20:29

Solar power will not be able to compete with conventional energy until there is a breakthrough in the technology, BP’s chief executive has said, in a further sign of the company’s move away from renewables towards oil and gas.
BP has invested hundreds of millions of dollars in making solar cells and components, but in the past six months it has been closing factories around the world, and announced a sharp cut in its investment in alternative energies, such as solar, from $1.4bn last year to $1bn (£658m) this year.

Tony Hayward, chief executive, on Wednesday told a conference in California: “I think solar is probably the most challenged of all of BP’s alternative energy interests.”
He added: “It is not going to make the transition to be competitive with more conventional power, the gap is too big.”
For solar power to make a breakthrough, there had to be a step-change in technology, he said.
BP has been strongly criticised by environmental campaigners for what they see as its attempt at “greenwash”: exaggerating its environmental credentials.
The “beyond petroleum” slogan adopted by Lord Browne, Mr Hayward’s predecessor, has been retained, but redefined to make clear that “it doesn’t mean we’re abandoning oil and gas, getting out of hydrocarbons, or focusing only on alternative energy”.
As recently as last year, BP estimated that its solar business was worth up to $3.9bn and said it planned to double its investment in the business in 2008 from $150m in 2007.
It set a target for sales of about 800 megawatts of capacity in 2010, up from about 160MW last year.
Since then, however, it has shut factories in Sydney and Madrid and cut production in Maryland. Manufacturing is being transferred to sub-contractors in China, giving BP the capacity to produce about double last year’s output, if it can find customers, but it no longer sets a target for solar sales.
Many other solar companies have been similarly cutting production and reining in their ambitions.
Copyright The Financial Times Limited 2009