BP Records First Ever Profits from Solar Division

BP Solar and other oil and gas companies face common accusations that their highly publicized interests in renewable energy serve more to improve their image than to improve the world and the environment on earth. But how about improving their bottom line? With over 30 years of investing in solar energy, BP is reporting a first ever profit in 2004 for their solar division.

BP has been involved in solar power since as early as 1973. Its subsidiary, BP Solar, is now one of the world’s largest solar power companies with production facilities in the United States, Spain, India and Australia, employing a workforce of over 2,000 people around the world. Over the last five years, BP International invested USD $500 million in this high growth, but relatively small business segment. Renewable energies such as solar power must and will play an important role in the future struggle against climate change, but probably not until 2020, says Steve Westwell, Head of BP Solar and Group Vice President in the International BP Group during a press meeting in Berlin. Nonetheless, many of the signs are already visible today that “solar power has an immense growth potential for the future – due to technological progress and therefore greater efficiency in transforming the energy inherent to sunlight. At the same time, prices will fall as the market penetration increases, demand grows and targeted support is provided by marketing and legislation.” Westwell explained that in view of the climate change around the world, human beings will be dependent on expanding alternative energy sources. “Although all of the renewable energy sources, including solar power, currently account for just 2.5 percent of the global demand for energy,” he did emphasize that “they will have to play an important role in the future!” BP believes that there are many signs that indicate just how much of a mass market solar power will become in the future. The annual industry growth in 2004 was more than 40 percent and over 1,000 MW were installed around the world. “Every time the solar power industry doubled in size, the prices fell by 20 percent — and that happens practically every three years,” Westwell said. The core growth markets in Europe are Spain, Portugal, Italy and Greece, and particularly Germany. “The German public sees solar power as being the greenest of all energy sources”, referring to a survey carried out by the Institut Allensbach in 2004. “Three quarters of all Germans voted for solar power as the preferred source of energy in the future.” At the moment, the demand for solar modules outstrips supply. Westwell is therefore confident that this enormous growth will continue to stimulate investment in solar power research and development in Germany and abroad. Westwell believes that the two core objectives of solar power are to ensure that the electricity generated by the sun should be independently competitive and that solar power should make a decisive contribution to the overall package of measures intended to tackle climate change around the world. In order to ensure that these goals are met, the production technology must above all become more efficient. He believes that there are several approaches to achieve this – for example a reduction in the numerous and costly stages of work required to produce solar power cells. He also believes there could be breakthroughs in research. Both of these aspects could “add 30 percent in efficiency”. In the last ten years alone, solar power cells have risen in efficiency by over 40 percent. Other improvements would be brought by cutting the costs of installation. All in all, he believes that the technology alone has “a lot of opportunities to develop customer friendly and technically improved systems at a lower cost.” In terms of political subsidization, Westwell pleads for maintaining the very successful system of guaranteed feed remuneration, which is planned to be upheld along with the system of emission trading. Emission trading helps reduce emissions of carbon dioxide, whereas guaranteed feed remuneration helps support the development of alternative energy sources. He believes that the German subsidization of solar power leads the field in Europe and sees it as “an example for the rest of the European Union”. It “helps speed up growth, allows companies to draw on the commercial benefits of size and ensures that insight is spread widely.” Success can only be guaranteed in the long term if there is security to plan investments and also growth in capacities. “In the race for commercial competitiveness among alternative energy sources, solar power now has its fixed place. And it is moving rapidly,” Westwell said.

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