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Why BP Solar Failed

After a 40 year run, it’s giving up in the face low cost manufacturing in Asia, and its inability to innovate.
December 21, 2011

BP Solar, which has roots going back decades to the early days of solar panel manufacturing, can’t compete in a difficult solar panel market, so it’s closing its doors, according to reports. It joins a number of other solar manufacturers, including famously the U.S. government-backed Solyndra, that have failed during difficult times for the solar industry.

According to the Financial Times,

“The continuing global economic challenges have significantly impacted the solar industry, making it difficult to sustain long-term returns for the company,” wrote Mike Petrucci, chief executive of BP Solar, in an internal email to staff last week.

“Over the last six months we have realised that we simply can’t make any money from solar,” a spokesman confirmed.

No doubt a number of factors contributed to its demise. Chinese manufacturers have driven down the cost of making solar panels, making it difficult for established companies to compete. (See my new feature, “The Chinese Solar Machine”). The growth of Chinese manufacturing capacity has contributed to an oversupply of panels caused prices to collapse.

But just as important is BP’s failure to capitalize on its own innovations. One of its own researchers, Nathan Stoddard, invented a new way to make silicon wafers for solar cells that could dramatically cut the cost of high efficiency silicon solar panels. But the company dragged its heals and never commercialized the technology. Manufacturers in China, developed their own versions of the advance and beat the company to it. (See: “How BP Blew Its Chance to Spearhead a Solar Innovation.”)

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