BP Bows Out Of Solar... and now Wind

NPR said:

The solar energy business is growing quickly, but future growth will not include oil giant BP.

At the IHS CERAWeek energy conference in Houston, BP's CEO made it clear the company is done with solar.

"We have thrown in the towel on solar," Bob Dudley said after delivering a wide-ranging speech Wednesday.

"Not that solar energy isn't a viable energy source, but we worked at it for 35 years, and we really never made money," he added.

BP, which announced it was winding down its solar business last year, says it is still committed to other renewable resources, such as wind power and biofuels production.

But the move away from solar is especially striking considering BP's recent history. In 2000, the company changed its logo to resemble the sun and made a big deal of its "beyond petroleum" campaign.

BP's exit from solar has more to do with a changing business than lack of will.

"The solar industry BP was involved in 10 years ago has very few similarities to the solar industry today," says Finlay Colville, vice president of the research firm NPD Solarbuzz.

Colville says BP was one of the early companies in the solar business. Back then, the market was based on a different model — one more focused on research and development. He says now the business is all about efficient production and low prices, something more suited to the Asian companies taking a lead role in the solar panel-manufacturing business; so BP's exit from solar doesn't mean the industry overall is in trouble.

"There's a lot of competition in the solar business these days, which is a good thing," says Rachel Shimshak, executive director of the Renewable Northwest Project in Portland, Ore.

She says today more people can afford to install solar panels. Prices have fallen nearly 60 percent in the past two years alone, according to Solar Energy Industries Association President Rhone Resch.

Despite lower prices, less than 0.5 percent of the country's electricity comes from solar. Resch says that's because all the other forms of electricity generation, such as coal and natural gas, had many years to develop.

"For the solar industry — which has really just caught hold in the last four or five years — it's going to take a few decades before we make a significant dent," Resch says.

But he says solar is the fastest-growing source of new energy in the U.S., and he expects that to continue.

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Reuters said:

BP (BP.L) has put its U.S. wind farm operation, one of the largest in the country, up for sale, marking the continued retreat of big oil companies from renewable energy investments while oil and gas projects offer them better returns.

The British oil company has already sold or earmarked for sale some $38 billion worth of assets, partly to raise funds to pay for its 2010 U.S. oil spill liabilities, but also to reposition itself as a smaller, leaner company with an emphasis on high-margin oil production and exploration. Reports said the sale could raise a further $1.5 billion.

BP would not put a value on any sale, but said in a statement it expected "attractive offers" for the assets. They include interests in 16 operating wind farms in nine states with a combined generating capacity of around 2,600 megawatts of renewable power, as well as a portfolio of projects in various stages of development.

Over a decade ago, big oil companies including BP and Shell began to ramp up investment in renewable energy. But the uncertain outlook for government subsidies and prices in solar, wind and other clean energy areas, along with the re-emergence of strong prices for oil and opportunities to develop large gas fields, have since distracted their attention.

BP, which under former chief executive John Browne once named itself "Beyond Petroleum", still has a substantial interest in Brazilian biofuels, but has invested only about $1 billion a year in renewables since 2005 from a total capital spending budget of well over $20 billion annually. It has no specific investment plans for the sector in the years ahead.

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