Shocker: BP quits solar power industry

bp Elites Go Sailin'

Maybe they wasted too much money on Yacht races?

BP Exits the Solar Industry (via Planet Gore)

By Greg Pollowitz

Bloomberg:

BP Plc, Europe’s second-largest oil company, will shut its solar power unit and quit the business entirely after 40 years because it’s become unprofitable.

The company will wind down the unit, BP Solar, over several months, Mike Petrucci, the unit’s chief executive officer, told staff in an internal letter last week. About 100 employees will be affected.

BP Solar is withdrawing from an industry that’s facing oversupply and price pressures after Asian competitors increased production. Panel prices plunged 48 percent this year, helping tip three U.S. makers including Solyndra LLC into bankruptcy, and Solon SE (SOO1), Germany’s first listed solar company, filed for insolvency last week.

“The continuing global economic challenges have significantly impacted the solar industry, making it difficult to sustain long-term returns for the company,” Petrucci said in the letter.

The rest here.

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Supply and Demand

henrychance

I remember when BP Amoco got into pre pregs to use in building sailboats. Big oil will always try new industries and leave some sectors that don’t make money. If they stay in solar, the business risk is subsidies.

The bottom line is that it’s the bottom line that counts.
Being ‘green’ costs too much green.

G. Karst

Reality is such a tough taskmaster. GK

I guess after the Gulf of Mexico oils spill and all, they couldn’t get money from Obama for their idiotic solar panel business. Why did it take forty years for them to get the message that it’s a loser?

pat

As a former owner of a solar company, I understand this completely. only one solar application makes sense: heating water. The idea that solar panels can do anything other than serve as a boutique power source is simply boneheaded.

Finally! Now, BP, the ‘rest’ of your inanes in/with/around the cAGW-scam should also be cleaned out. Plenty thanks for doing so in advance. 😀
Brgds from Sweden
//TJ

John

The beginnings of the CG2 big fallout?

Steve W.

How about that 25 year warranty on your panels? Maybe BP will honor it, but how about all of the companies that are going belly up?

BarryW

Their going to play this as just “Big Oil” doing something nefarious and immoral to support their oil prices.

pat said @ December 21, 2011 at 10:31 am
“As a former owner of a solar company, I understand this completely. only one solar application makes sense: heating water. The idea that solar panels can do anything other than serve as a boutique power source is simply boneheaded.”
Almost completely agree. However, I’d hardly call PV a “boutique” power source where the electricity supply companies charge so much for connection to the grid that they make solar power more economic. A friend in NSW was quoted more than double the cost of his PV array for a grid connection. It’s not huge; he uses propane for space heating, cooking and hot water.

Dave

I often think that Governments and Company’s should employ reasonably educated, street smart lay people instead of idiotic professionals.
My self for example:
I predicted the financial crash many years ago by the actions of governments and the banksters.
I said the well before the invasion of Iraq it was a huge mistake due to the pathetic WOMD and yellow cake evidence and the fact that Saudi Arabia was the source of the 911 hijackers.
I said the well before Kyoto and Global warming grabbed the Western world governments by the Nuts it was a huge hoax and absolutely stupid to expect the West to go it alone.
I said the that wind power would be a huge and expensive boondoggle and drive energy cost through the roof.
I said solar power will prove to be a huge and expensive mistake.
I said solar power will will not be made in ANY western country competitively enough to manufacture it in the long term and it will fail.
I said solar power will be manufactured in China cheaply and sold to the west expensively.
I read and follow the news and think what the hell that will not work because………….
Call me a Skeptic with common sense and the ability to see the obvious.
the same common sense of most of the readers here at WUWT and skeptics in general have.
If any Government, organization or wealthy individual wants to hire me , I’m available.
My track record is 90+%
Futurist Dave.

harvey

Actually the big problem is that the WEST cannot compete with the solar products coming out of China… Nothing else. If China sells panels for 1/2 your cost well your company is hosed.
I thought you guys were all for freemarkets driving the economy.

harvey

just a quote from the press release:
“BP Solar is withdrawing from an industry that’s facing oversupply and price pressures after Asian competitors increased production. Panel prices plunged 48 percent this year, helping tip three U.S. makers including Solyndra LLC into bankruptcy, and Solon SE (SOO1), Germany’s first listed solar company, filed for insolvency last week.”

harvey

Dear Barry
“Their going to play this as just “Big Oil” doing something nefarious and immoral to support their oil prices.”
Awe thats so nice of you… Merry Christmas my friend.

harvey

Dear Tom
“The bottom line is that it’s the bottom line that counts.
Being ‘green’ costs too much green.”
Totally wrong. Supply and Demand.
yours Harvey

Microbiologist

BP is not any longer a Brit or even EU business. Check out the shareholding readily available online. Anthony – you are a stickler for details, normally.

harvey said @ December 21, 2011 at 10:57 am
“Actually the big problem is that the WEST cannot compete with the solar products coming out of China… Nothing else. If China sells panels for 1/2 your cost well your company is hosed.
I thought you guys were all for freemarkets driving the economy.”
Unfortunately, the West hasn’t had a free market economy since the 19thC. And the Western governments have squandered taxes for the last 50 years. Currently, China has a policy of jobs at any cost, a policy that will eventually collapse under demands from the hoi poloi for a better quality of environment as their prosperity continues to rise. The West handed over its IP and manufacturing to China for free and the Chinese are taking full advantage.
It’s an interesting little planet we live on 🙂

T.C.

Well… BP has to do something to make up the expense after paying protection money to a certain Chicago politicians shake-down fund.

JEM

I’ve got 2.5kW of BP Solar panels on the roof, been there since ’03…
No, the Chinese do not believe in a level playing field. Are they ‘subsidizing’ solar panel production? Yeah, maybe. What’s the best model for the rest of us in the long run – is the loss of production capacity in the West worse than the benefit to Western consumers through availability of a cheap commodity product funded by the Chinese government?
For any individual product, probably the latter. For an economy as a whole where it involves hollowing out entire sectors, far more debatable.
Will there eventually be a PV solar production process – ‘printable’ panels, for instance – that’ll render the Chinese investment in silicon PV moot?

Latitude

I hope this means we don’t have to see any more of those stupid ads on TV……………………

George E. Smith;

Well I would like a dollar for every media report on the profitability of this or that segment of the Solar power industry; and another dollar for each asserted reason for the demise of this or that participant. So BP solar is going ppffft because panel prices dropped 48 percent.
Hey ! Earth to Bloomberg; a whole lot more solar energy companies (besides Solyndra) will go belly up; UNLESS solar panel prices come down a whole lot more than they have. The Solyndra apologists blamed China for bombing the prices on them. It can be concluded then, that Solyndra would never have been able to make a profit, unless solar power was much more expensive than it already is. Hey; the idea for replacing some already existing technology, in a given market place such as energy, is to have a more efficient, cheaper energy source than the entrenched competition. You dont replace an existing industry by being more expensive, and less efficient.
In Solyndra’s case, they might have been able to make their solar panels for zero cost (let’s imagine), and they still would have gone belly up, because nobody in their right mind, would ever buy a Solyndra solar panel, and use it to occupy the precious solar insolation space on their roof or other valuable real estate. You only get 1 kW per square metre (max), so if you don’t put up the highest power conversion efficiency receivers in that space, you must be crazy.
Long before Solyndra became a political and financial scam; it was a science and engineering scam, and Nobel Laureate Energy Secretary Chu, should have seen that, and nipped the whole fraud in the bud.
Well a Nobel Prize for Optical Trapping, that somebody else invented anyway, doesn’t necessarily make one an expert on PV solar energy collection.
Solyndra used the yuppy thin film CIGS PV material; the acronym for Copper, Indium Gallium Selenide. The world record Laboratory conversion effciency achieved for CIGS material is about 19%. Practical cells seem to be more in the 11-13 percent range; but it’s “cheap” they claim, and you don’t use very much of those exotic materials; well compared to silicon; which largely occupies the world’s tropical deserts.
So since the material is cheap, Solyndra decided to use more of it, than they really needed; pi times as much as it turns out, since instead of a simple flat panel of their cheap goop, they filled the space with a cylindrical tube of the stuff, aimed at the same incoming solar beam. CIGS is claimed to be strongly solar absorbing, so one can conclude that the top side of the tube effectively shadows the bottom side of the tube which thereby doesn’t get much sun at all. So they coated the CIGS on the outside of a glass cylinder, and now they have pi times as much substrate glass, as well as pi times as much CIGS.
Well actually it’s much worse than that because CIGS like many of the II-VI compounds such as Cadmium Selenide, just doesn’t like moisture; which happens to be a permanent constituent of the earth’s atmosphere.
So they enclosed the CIGS tube inside a second larger tube, and hermetically sealed them to protect the CIGS from destruction.
That’s now 2pi times as much glass as for a flat plate silicon panel. Making glass, is of course a somewhat energy consuming process, not vastly different from making silicon. Yes CIGS is much cheaper than silicon, I am sure.
Those cyclindrical tubes of course cast shaows, as the sun moves around them, so you have to space themn apart so they dont shade each other; so that is even more valuable real estate you have to dedicate to this boondoggle, impractical scheme.
In short, Solyndra never had other than a Rube Goldberg solar panel to sell, in the first place; and my apologies to Rube for associating his name with such incompetence.
How come Physics whizz Chu didnt know this, and stop wasting taxpayer’s funds on the scam.
With PV solar energy, virtually nothing matters except the conversion efficiency, because that is what determines how much area you have to sacrifice to solar collection.
I recently attended a solar energy Symposium, at the University of California, Merced. At that meeting, a new record conversion efficiency for multijunction solar cells was announced.
43.5 % or thereabouts was reported for a triple junction cell; that of course is a triple bandgap cell, to efficiently convert a wider swath of the solar energy continuum spectrum of energies.
A thin Gallium Arsenide cell process was also reported, shoing that lower materials usage is not the exclusive domain of materials that you can spray on anything, out of a garden hose.
Fron the UC Santa Barbara Team, came a report on another wide bandgap, high conversion efficiency material, a GaN/InGaN structure; some chap named Nakamura was heavily involved with that Team. I almost got lulled into thinking I was watching an LED process paper, rather than a solar cell one; but it was pointed out in another paper, that good solar cells should also be good LEDs; well not necessarily of visible radiation. Indirect materials such as Silicon are of course an exception; which is why they have efficiency limits.
The newer exotic materials, and Non-Imaging optical systems point to more effective usage of these materials, to get higher power conversion efficiencies, and better use of real estate.
Cheap low efficiency solar panels; will always be a drag on the use of solar energy, whose supply is limited by the sun.
But it will never replace existing energy sources, unless it is cost competitive; and that usually means on an energy capital basis, not some economist shell shuffling game.
We got to where we are now without external help from somewhere else (ET), so we know that we have had a net energy availability gain, since primordial times. Substitute sources, simply will never succeed, unless they too can hoist themselves by their own shoe laces, without cost hiding subsidy from an already effective source.
It makes no sense to consume already existing energy supplies, to access other sources, that make even less total energy available to do the useful stuff, we use energy for.

Latitude YOU said: I hope this means we don’t have to see any more of those stupid ads on TV……………………
What is bugging me amongst many of these green clean give me your money schemes being seen on TV is the BUY SOLAR NOW before the carbon tax arrives. I distinctly remember hearing the government say they would pounce on any company that did this …. blaming proce rises on the due to arrive carbon tax……. but there it is, plain as the nose on Julia’s face!

But solar power has so much potential.
Potentially, if you cover acres and acres of land with panels, and potentially if the sun shines, and potentially if you make some of them in the US, and potentially if you mandate and subsidize it, then potentially you can have some fraction of the power you could get from Illinois outlawed high BTU coal.
Just look at all that potential. http://energy.gov/

George E. Smith said @ December 21, 2011 at 11:32 am:
“It makes no sense to consume already existing energy supplies, to access other sources, that make even less total energy available to do the useful stuff, we use energy for.”
It never ceases to amaze me that so few people understand this most basic of concepts.

DirkH

harvey says:
December 21, 2011 at 11:00 am
“Dear Tom
“The bottom line is that it’s the bottom line that counts.
Being ‘green’ costs too much green.”
Totally wrong. Supply and Demand.
yours Harvey”
Harvey, the demand in Germany, the biggest market, is artificially created by forcing every electricity ratepayer to pay 3.5 Eurocents more for a kWh; and this money pays for an artificially inflated tariff paid to every solar energy / wind energy producer.
Without this cross-subsidy, there would be no demand.
Politicians call these systems they create “free market solutions”; but that’s as Free as the Democratic People’s Republic Of North Korea is democratic.

Marcus

As long solar cells don´t really work during night i see no future for them and don´t let us start talking about solar radiation density during winter…..

DirkH

And by coincidence, today the German solar-thermal and PV company Solar Millenium filed for bankruptcy as well. They wanted to build some project in California.
http://notrickszone.com/2011/12/21/rip-bp-shuts-down-solar-business-also-in-germany-solar-industry-faces-collapse/#comment-65704

Look for BP to be excoriated by the Greenies now. Look for Gore to threaten to sit on the Board of Directors,including the CEO. I mean that literally!

harvey

Dear DirkH
Maybe the USA should stop subsidying all the OIL companies 🙂
yours
Harvey

More Soylent Green!

China is subsidizing their solar manufacturers and dumping the products on foreign markets below cost. The subsidies and Solyndra-style loans mean public risk for private profit for the Chinese people. Together with the dumping, this means every unit sold costs the Chinese citizens money.
We can’t let this dump gap continue. If the Chinese are losing $25 billion a year, then we need to lose $50 billion a year. We cannot allow this imbalance. I demand tariffs, mandates, price supports and more insider loans. We can’t allow to China to take the lead in pissing more money down the green black hole than we do.
~More Soylent Green!

Cassandra King

Well, as President Obama said in 2008, Solar power is the future, within the next five years millions of new green sustainable jobs will have been created as the USA moves away from old polluting fossil fuels to clean and green and efficient solar and wind power”. Thats the trouble with supposedly super smart people, they usually turn out to have less about them than a stunned mullet.
Well, a prophet he aint and this is supposed to be the most learned and deep thinking President ever? He not only got it wrong, he got it about as wrong as is humanly possible to get it, and not since the Captain of the Titanic gave the order for full speed ahead in an area stuufed with bergs has someone so supposedly smart got it so very wrong.
Merry Xmas to all.

ew-3

Large companies like BP have lots of ways of knowing what is going on in Washington DC before the rest of us.
My guess is that they know the end of subsidies is coming and they want out.

Dr. Dave

pat says:
December 21, 2011 at 10:31 am
“As a former owner of a solar company, I understand this completely. only one solar application makes sense: heating water. The idea that solar panels can do anything other than serve as a boutique power source is simply boneheaded.”
======================================
pat, I agree with your assessment of “boutique” power sources. My house was built in 1977 (the Carter era) when electricity was supposed to remain incredibly cheap. Alas, it is an all-electric home with ceiling electric radiant heat. It also had a roof mounted solar assist water heating system. This system thermostatically controlled the flow of propylene glycol through the roof mounted solar collectors to a heat exchange unit mounted next to the electric water heater. The other half of the system ran potable water through the heat exchanger to the water heater. I spent a fortune on plumbers keeping this damn system working. Finally I learned how to service it myself but even then stuff was always falling apart and needing replacement. You need pumps and hoses to recharge the system, roof mounted blow-out check valves were always in need of replacement, propylene glycol is ridiculously expensive, etc.
In theory it’s a great idea. When it worked I actually had almost “free” hot water in the summer months. But that “free” hot water cost me dearly in terms of money and my time. So when the 30+ year old water heater started leaking it was a no-brainer. A replacement water heater with all the input and output connections would have cost me over $1,500. A simple 50 gal modern electric water heater only set me back $160. Of course the plumber screwed me but I haven’t noticed any significant change in my outrageous electric bill since the change. Maybe they make these systems smarter than they did 34 years ago, but the more complicated the system the more likely it will require costly service. I’ve played around with PV systems, too. Battery maintenance and replacement pretty much negates the benefit there. I’ve been impressed with passive solar designs for home heating and cooling.

harvey

Dear rwct
“Look for BP to be excoriated by the Greenies now. Look for Gore to threaten to sit on the Board of Directors,including the CEO. I mean that literally!”
Why thank you rwct, I’m impressed by your prognostications. LOOK A DEER!!
yours
Harvey

1DandyTroll

That’s what happens when EU countries reduce the subsidies for “green” technology and alternative energy, reduced profit follows.
So it has nothing to do with supply and demand, unless you count the supply of subsidies as supply in supply and demand. :p

Mark Besse

Out of 79,700 BP employees only 100 would be affected (0.125%). BP is closing down rounding error. It’s not even enough to consider ‘green-washing.’

Harvey says:
“Maybe the USA should stop subsidying all the OIL companies”
Oil companies pay more taxes than the average company so they aren’t subsidized, like Solyndra, etc. But thanx anyway, and keep playing. We enjoy the added site traffic.

More Soylent Green!

harvey says:
December 21, 2011 at 12:25 pm
Dear DirkH
Maybe the USA should stop subsidying all the OIL companies 🙂
yours
Harvey

Yeah.
Oh wait, we don’t. The oil companies don’t get any subsidies from the federal government and don’t qualify for any special tax breaks.
And they pay billions and billions in taxes.
And you’re free to buy their products or not.
~More Soylent Green!

Konrad

The death of BP Solar is not cheering news.
They had a reputation for producing the best panels. 80% output guaranteed for around 20 years and proof against golf ball sized hailstones at terminal velocity. These panels had many legitimate uses in remote power applications. The illegitimate use of PV in heavily subsidised home instillations and large scale grid destabilising commercial installations have caused the market to be flooded with cheap crap. When mass producing de-laminating trash in china, you don’t have to pay so much to handle the 3 tonnes of carbon tetrachloride involved in producing each tonne of polycrystalline silicon.

George E. Smith; says:
December 21, 2011 at 11:32 am

Fine post. Your sarcastic references to no-clue-Chu are particularly apropos. Almost as bad as highwayman-Holder running the DOJ.

John-X

Maybe they will also ditch that stupid fake sunflower logo
and lose the phony “green” “beyond petroleum” slogan
YOU’RE A PETROLEUM COMPANY, idiots

DirkH

harvey says:
December 21, 2011 at 12:25 pm
“Dear DirkH
Maybe the USA should stop subsidying all the OIL companies 🙂
yours
Harvey”
Fossil fuel companies pay taxes to other governments. They can deduce these payments from the taxes they would have to pay in the US. The green groups count this as subsidies, but it’s a normal process against double taxation that all internationally active companies use.
http://wattsupwiththat.com/2011/12/03/the-dark-future-of-solar-electricity/#comment-817470

ChE

Almost completely agree. However, I’d hardly call PV a “boutique” power source where the electricity supply companies charge so much for connection to the grid that they make solar power more economic. A friend in NSW was quoted more than double the cost of his PV array for a grid connection. It’s not huge; he uses propane for space heating, cooking and hot water.

There are other boutique uses as well, traffic signs too far to serve power to, telemetry systems, etc. If you see a solar panel at the side of the road someplace, it’s probably not driven by green fantasies, it’s driven by economics.

harvey said @ December 21, 2011 at 12:25 pm
“Maybe the USA should stop subsidying all the OIL companies :)”
Care to put a figure on those subsidies? Saudi Aramco, National Iranian, Petróleos de Venezuela, Gazprom, Rosneft, China National Petroleum, Petronas, Petrobras? I’d be surprised if the USA subsidises any of these “OIL” companies who just happen to control over 75% of world oil production.

DirkH

DirkH says:
December 21, 2011 at 12:14 pm
“And by coincidence, today the German solar-thermal and PV company Solar Millenium filed for bankruptcy as well. They wanted to build some project in California.”
Looks like Solar Millenium got 2 bn federal US loan for that project – think Solyndra times four. (Just heard it on Dana Loesch’s show)

Drill baby drill!
Big companies should never forget what its core business is….Remember you must produce enough oil to burn all those, “convenient” for politicians only, built Wind Towers in the UK which are bankrupting the UK and killing old people.

John-X said @ December 21, 2011 at 1:28 pm
“Maybe they will also ditch that stupid fake sunflower logo and lose the phony “green” “beyond petroleum” slogan YOU’RE A PETROLEUM COMPANY, idiots”
According to the Wiki-bloody-pedia:
“BP p.l.c.[3][4] (LSE: BP, NYSE: BP) is a global oil and gas company headquartered in London, United Kingdom. It is the third-largest energy company and fourth-largest company in the world measured by revenues and one of the six oil and gas “supermajors”.[5][6] It is vertically-integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading. It also has major renewable energy activities, including in biofuels, hydrogen, solar and wind power.”
Combined, ExxonMobil, BP & Shell account for only 10% of world oil production and 3% of oil reserves. Sounds like the oil business might only play a minor role in BP’s revenues.

Dave Wendt

On a somewhat related note, since the likely decline of the type of subsidies discussed are probably a good part of the reason for BP’s withdrawal from the solar market
http://www.michigancapitolconfidential.com/16192
Chevy Volt Costing Taxpayers Up to $250K Per Vehicle
Analyst: ‘This might be the most government-supported car since the Trabant’

ChE

Combined, ExxonMobil, BP & Shell account for only 10% of world oil production and 3% of oil reserves. Sounds like the oil business might only play a minor role in BP’s revenues.

No, what that means is that the big players in the oil business are the state oil companies in the Middle East and Latin America.