BP Solar Closing Maryland Solar Panel Manufacturing Plant
BP Solar announced on March 26, 2010 that it would cut back operations at its main solar panel manufacturing plant in Fredrick, Maryland. According to an Associated Press report, the company plans to eliminate about 320 of the facility's 430 positions with many of the job losses coming from the plant's manufacturing unit. BP Solar will still maintain its Fredrick presence for sales, marketing, research, and project development.
According to Chemical and Engineering News, the recent layoffs are part of BP's plan to move its manufacturing capacity from regions with high labor costs, like the United States, to countries with lower labor costs, like China and India. The company claimed to reduce costs by more than 45% after closing other high cost manufacturing plants in Sydney, Australia and Madrid, Spain at the beginning of 2009.
In addition to the high manufacturing costs, the company cited steep deflation in the price of solar modules during the 2009 fiscal year as a primary reason for cutting its American manufacturing operations. The Washington Post quotes Reevad Fezzani, the CEO of BP Solar: "Solar declined between 40 and 50 percent since the onset of the financial and economic crisis, compressing industry margins and driving solar power towards grid competitive pricing." He added that "by shifting our supply to a high-quality, low-cost supply base to serve both distribution customers and large-scale projects, we have strengthened our position as a provider of competitive solar solutions with our offer of the highest lifetime value."
BP Solar's decision to relocate its manufacturing capacity to China highlights a problem that the American economy faces with its renewable energy ambitions. According to Thomas Gibson in a letter to the editor in the Washington Post, the Chinese government uses currency manipulation to favor its domestic manufacturers and intends to "preemptively claim new industries such as wind and solar power." Gibson, president and chief executive of the American Iron and Steel Institute, writes that the American government needs to act quickly in coordinating trade, climate, and energy policy to keep American operations competitive in the global market. Otherwise the "clean energy jobs" often discussed on campaign trails will bleed from American cities toward regions that are more conducive to development.