BP Plc , Europe’s second-largest oil company will shut its solar power unit and quit the business after 40 years because it’s become unprofitable. Photographer: Andrew Caballero-Reynolds/Bloomberg
BP Plc is exiting the solar business after 40 years, countering a trend led by Google Inc. (GOOG), Warren Buffett and Total SA (FP) of investing in the industry just as competition drives down the cost of sun-based power.
Europe’s second-largest oil company will wind down the unit over several months because it has become unprofitable, BP Solar Chief Executive Officer Mike Petrucci 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 Chinese competitors increased production. Total, Europe’s third-biggest oil company, Buffett and Google have entered the industry with investments over the last six months to take advantage of attractive tax breaks, declining costs and a source of power hedged against high fossil-fuel prices.
BP’s move is an anomaly with more companies trying to get involved than are getting out, said Paul Leming, an analyst with Ticonderoga Securities LLC analyst in New York.
“Two of the biggest oil companies have taken the opposite approaches,” Leming said in a phone interview. “The move toward alternative energy continues to be a well-recognized megatrend.”
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