BP Solar Business Exit Counters Trend by Google, Buffett

 BP Plc is exiting the solar business after 40 years, countering a trend led by Google Inc., Warren Buffett, TransCanada and Total SA 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, 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. TransCanada also said it is buying nine Ontario solar projects from Canadian Solar Solutions Inc. for $470-million.

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."

BP's solar equipment venture in India with Tata Power Co. is conducting "business as usual," K. Subramanya, chief executive of Tata BP Solar India Ltd., said today by phone. BP owns 51% of India's third-biggest cell and panel maker. Tata Power, the utility arm of the industrial company that owns Corus Group and Jaguar Land Rover, declined to comment.