BP Solar Exits Thin Film Production

BP Solar, a major player in the solar photovoltaic market is getting out of the thin-film business, causing some in the industry to wonder what’s next for this technology.

New York, New York – December 2, 2002 [SolarAccess.com] The company has unveiled a “repositioning plan” that will concentrate on its key markets supported by growth in worldwide manufacturing of its crystalline-based products. BP Solar has crystalline plants in the United States, Spain, India, and Australia and expects to double current crystalline capacity in 2004. In the past five years, BP Solar has invested as much as US$300 million in solar technology with less than 15 percent of its overall production in thin film, according to the company. “BP Solar is positioning itself to continue sales growth of roughly 30 percent per year,” said Harry Shimp, BP Solar president and CEO. “That means focusing our resources on those markets and technologies that offer the best probability of success. Crystalline production capacity represents more than 85 percent of BP Solar’s global manufacturing operations and recent technical and manufacturing cost improvements bode well for its future.” Ken Zweibel, manager of the Thin Film Partnership Program for the National Renewable Energy Laboratory (NREL) called BP Solar “one of the top three” players in the thin film industry and expressed concern about what will happen to the technology developed in the company’s Fairfield, California and Taono, Virginia facilities. Technology that in a large part has been funded by NREL. Zweibel said he understands that BP’s decision to get out of thin film was based on the need to remain competitive in the solar crystalline market, an area that is much closer to realizing profits than thin film, but he expressed bitterness that NREL’s investment in the company has ended this way. Tom Surek, Manager of the PV program at NREL said that the agency has invested “about US$1 million per year” to BP Solar and its many predecessors on cost-shared contracts with BP likely to have doubled that amount in their own investment. Cadmium telluride-based thin film manufacturing will be halted at the Fairfield, California facility, which will be converted to serve as the center for North America warehousing and distribution as well as the West Coast base for sales and marketing. The company will also close its amorphous silicon-based Toano, Virginia thin film plant if no company steps up to buy the facility by end of 2002. The plant closures will result in the elimination of about 260 jobs: 100 in Fairfield and 160 in Toano, although some 145 manufacturing jobs may transfer to a new operator. “We have worked very hard with the National Renewable Energy Laboratory and other partners on the research and development of thin film technology,” Shimp said. “However, while the technology continues to show promise, lack of material demand and present economics do not allow for continued investment.” Paul Wormser, COO at Konarka Technologies, a Massachusetts-based manufacturer of thin film PV, said he is concerned about the BP Solar employees who will be effected by this decision, many of whom he has worked during his years in the industry. “My heart sank, I was surprised,” Wormser said. “BP made very nice progress on those technologies.” Wormser, who said Konarka’s thin film technology is “completely different” than the area BP was working in said this could effect the future of deposited thin film technology. Sarah Howell, spokesperson for BP, parent company of BP Solar said the decision to exit thin film research and manufacturing was purely a business decision. “It’s not for us at this time, it’s about the economics,” Howell said. “We think it shows long term promise, maybe for a company with a longer term strategy and vision.” With their thin film program coming to a halt, BP Solar has stopped work on two, three-year NREL cost-shared contracts worth US$900,000 and US$400,000 per year. The contracts, one based on amorphous silicon technology the other on cadmium telluride, were signed this year. Both Surek and Zweibel said BP’s decision doesn’t necessarily end the progress made through the BP Solar/NREL partnership. “From our perspective, we’re very positive about both technologies and if a suitable buyer came in and convinced us they had the resources and means to continue the research we would certainly talk to them,” Surek said, adding that the decision to transfer or start a new contract is NREL’s decision, while the decision to sell the technology and facilities is BP’s decision. “We’re disappointed, because it’s always tough losing an industry partner that we thought had deep pockets because this technology will take deep pockets to bring to the marketplace.” Zweibel said he thinks there is a “chance of sale” of both the California and Virginia BP Solar facilities although BP has only expressed interest in selling the Virginia facility. He said the Tuano facility may be appealing to a buyer because it is an operating plant, with definable costs. The Fairfield facility is in a much earlier stage and could result in a more risky investment. Ultimately, the focus of a potential investor will determine the fate of the two plants. The BP decision comes toward the end of a year that has seen the entrance of Sharp solar into the North American market and the joint venture between RWE Solar and Schott Applied Power. Changes that prove, if nothing else, PV is a complex, emerging business that will likely see more changes soon.
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