BP Solar, the alternative energy subsidiary of the oil industry giant which received a $7.5 million Department of Energy grant only four years ago, announced last week it would exit the solar business.
The unit just closed its only U.S. manufacturing facility, in Frederick, Md., last year. The company said it would outsource its production of solar photovoltaic panels to China and India. BP CEO Tony Hayward told the Washington Post at the time it was “moving to where we can manufacture cheaply.” BP auctioned equipment in January this year from the closed plant, and in a sign the overall industry – with bankrupt Solyndra as its face – is completely tanking, an experienced industrial auctioneer told the Frederick News-Post, “We’ve been doing more solar technology auctions lately.”
So much for the excuse that U.S. solar companies “can’t compete” because of the cheap, heavily subsidized production of panels in China and India. BP sent its manufacturing to those places, which would presumably make solar viable, and it’s still shutting down – even with its own U.S. grants.
According to Bloomberg, BP Solar CEO Mike Petrucci told staff last week, “The continuing global economic challenges have significantly impacted the solar industry, making it difficult to sustain long-term returns for the company.”
The news agency noted that about 100 employees will be affected, and blamed “oversupply and price pressures” for the unit’s downfall, in addition to its earlier shutdown of several factories in Spain (job losses: 480) after subsidies dried up there.
It was a fast and steep fall for BP Solar, which only six months ago produced this video (featuring installer “Simon,” who presumably is one of the cutbacks) espousing the innovative qualities of its panels (including being “shipped in environmentally friendly packaging, to minimize waste”):
Less than a month later, BP Solar said it would stop manufacturing panels.
And it was only two years ago the company was almost exclusively promoting itself with the “Beyond Petroleum” motto (“Can solar power become mainstream?…We think so.”) – even before the Gulf of Mexico oil disaster:
In a later, less downbeat update to its story, Bloomberg tried to make the case that BP’s move ran counter to a larger “trend led by Google Inc., Warren Buffett and Total SA of investing in the industry just as competition drives down the cost of sun-based power.” That, of course, ignored Google’s recent move to dump its “Renewable Energy Cheaper Than Coal” program, in which it had dedicated an engineering team to research and try to improve solar technology. It was also about the time reality hit Google in the face over its investment in the massive Ivanpah (Calif.) Solar Electric Generating System in the Mojave Desert, which has hit several obstructions from environmentalists because of the threat to desert tortoises.
Meanwhile rosy picture painters at Bloomberg noted how Buffett’s investment company bought a nearly $3.8 billion stake in two solar projects in California and Arizona, while the journalists casually admitted that “generous solar tax credits valid to 2015 may have lured” him. Undeterred by that caveat, the Bloombergers tracked down a financial analyst that happily told them, “The move toward alternative energy continues to be a well-recognized megatrend,” while they downplayed the gloom and doom expressed by BP Solar CEO Petrucci in the story’s earlier version.
Similarly glowing, USA Today reported recently that according to its own analysis, the stimulus enabled a number of technology companies to “soundly beat the stock market,” enabled some initial public offerings, and enhanced the coffers of wealthy venture capitalists. Therefore, presumably, taxpayers are to be happy they have helped enormous, diverse companies like Honeywell and Johnson Controls boost their bottom lines, while making sure that Fisker Automotive’s $95,900 electric “luxury sedan” makes it to market for wealthy auto enthusiasts who want a quirky extra vehicle to show off to their friends.
“The government has been a better (venture capitalist) than a certain number of people on the Street,” said (surprise!) Obama bundler Steve Westly, who is also an investor in Tesla, another high-priced electric car company that received millions of dollars in stimulus money.
Note to the legacy media: There is no “megatrend” to invest in renewables without enormous taxpayer subsidies. Journalists would do well to ignore the unrelentingly optimistic forecasts of self-interested, biased shareholders, and instead analyze the facts as they are.
One analyst sympathetic to the solar industry was able to overcome his own emotions and on Thursday delivered a largely dismal review of developments in 2011. Green Tech Media’s Eric Wesoff identified 10 trends from a year he characterized as “a bit more nerve-wracking than the last,” which will “echo into 2012.” Besides the obvious Solyndra debacle, Wesoff identified as disconcerting the very possible end of the 1603 tax grant giveaway program (one of the biggest tools that expanded wind and solar projects), and also the huge drop in stock value of industry giant First Solar, which was once enhanced by the late John Walton of Walmart fame.
Maybe the pro-carbon reduction, pro-renewables crowd is starting to get it, even if the formerly mainstream media isn’t. Jigar Shah, CEO of the nonprofit Carbon War Room, wrote recently, “The federal government should get rid of permanent energy subsidies for all energy sources, including fossil fuels, nuclear, solar, wind, biofuels. This would force everyone to innovate, compete and win–or lose–on their own merits.”
The truth is, BP Solar has been around for forty years and was also considered one of the big players in that form of renewable technology. But all the subsidies, reductions in costs, and regulatory friendliness could not make it profitable for the world’s third-largest energy company. Can it be any clearer that the “Green” economy has been built on a media-supported bubble that is now bursting?
Paul Chesser is an associate fellow for the National Legal and Policy Center.