BP Solar lowers cost in drive toward grid-competitive electricity prices
Focus on growth through lower cost supplies and manufacturing will lead to phase out of module assembly at Frederick, MD, plant. Silicon casting, wafering, and cell manufacture to continue.
Frederick, MD, 31 March 2009
Source: BP Solar, press release
http://www.bp.com/genericarticle.do?categoryId=9019567&contentId=7052169
BP Solar today announced plans to refocus its manufacturing activities globally, and to reduce its unit costs by 25 percent by the end of 2010. It will achieve this by accessing lower cost supplies, and by continuing to grow only its most competitive manufacturing worldwide. “The decision is part of our long term strategy to grow our solar business by reducing the cost of solar power to that of conventional electricity delivered through a modern power grid, and in time without the need for government subsidy,” says Reyad Fezzani, CEO of BP Solar.
As a result, module assembly at Frederick, MD will be phased out, and silicon casting, wafering, sizing and solar cell production will continue. The end of module assembly at Frederick will result in the elimination of approximately 140 jobs out of around 600. Earlier today the company also announced the closure of its cell manufacture and module assembly facilities in Madrid, Spain with the loss of approximately 480 positions out of 575.
“We deeply regret the impact of this business decision on our employees and the local community,” Fezzani said. “We have a long history at both the Frederick and Madrid sites. Competitive high-tech manufacturing of ingots, wafers and cells will continue at Frederick. Engineering, technology product development, sales and marketing and other business support functions will also remain at both Frederick and Madrid.”
All affected eligible employees will receive job placement assistance and transitional resources. In 2008 BP Solar signed a series of strategic contracts with a number of global high quality suppliers of wafers and cells to supplement its own manufacturing capacity. This has enabled it to increase sales and lower costs. In spite of the reductions announced today, BP Solar’s total global manufacturing capacity is expected to increase in 2009 and 2010.
“This comes at a time when solar markets are unsettled by the impact of the global economic environment, an over-supplied market and increased competition,” said Fezzani. “While the long term fundamentals for solar power remain strong, soft demand, lack of available credit for many players, and substantial price reductions due to high inventories require us to respond to remain competitive. In this environment access to low cost manufacturing and supply is critical to our profitability and to serve a growing customer base.”
In 2009 BP Solar has the raw material resources and capability to manufacture and sell up to 320 megawatts in modules, a 100 percent increase on 2008. It also has a stable and growing competitive, long term, high-quality silicon contract position with leading global suppliers. Commenting on the long term prospects for the US solar market, Fezzani added: “The US has undoubted potential to become the world’s largest solar market. BP Solar will deliver high-quality solar systems with the lowest lifetime cost of electricity to US customers. We believe that a growing market is the way to create material solar-related jobs – and three in every four of those jobs will be in downstream distribution, construction, installation, financing and other support services.”
BP Solar currently employs around 2,200 staff worldwide, directly and through joint ventures. It is one of America’s leading marketers of high-quality solar photovoltaic systems and will continue to fulfil its commitments to service its products and honor its warranties.