Wednesday, December 21, 2011

BP Exits the Solar Biz

I always had a soft spot for BP coming into the solar business and was disappointed when they exited.  In full disclosure, my father worked for BP on the refining side for 20 years and BP paid for my schooling in England & university in Scotland.  

BP came in with a bang around 1997 and dominated the US solar industry for about five years.  Their strategy was to be the master distributor for PV, inverters, racking, batteries and BOS and they did a great job.  From my perspective as a poor solar guy, BP was like the rich uncle coming in to raise the family to the next level.  I thoroughly enjoyed working with them and the $100mm they invested. 

BP was well positioned for the advent of the grid tie market in California in 2002. Things went sideways as a result of what was to become a regular event, a leadership change.  Every 2 to 3 years BP HQ would appoint a new head.  My guess is that these young Turks were rotated though the various divisions of BP as part of their leadership training.  The Turks came from refining and chemical to learn what they could and move on. 

Around 2002, BP put in a changed leadership and decided to focus on Home Depot.  It was a brilliant move to take solar mainstream but it had its consequences, namely cutting out the older BP distributors.  With the rapidly growing global grid tie market, there was not enough product to go around & BP cut off their distributors in order to service Home Depot.  Within two years most of the old distributors deserted BP because they couldn't get a reliable supply of product.  BP also opened the door of the US to Suntech.  Ironically it was Roger Efird, who started the BP/Home Depot program, who helped establish Suntech as a force in the US.  This isn't to say the solar distributors were innocents in all this.  Many of them had their hands slapped several times for shipping containers of BP modules from the US to Germany in violation of their distribution agreement.  Eventually it quietened when one of the distributors was permanently cut off after the third offense.

Undeniably it is BP's choice to do what they think is right for the shareholders.  Let's face it solar is chump change compared to the other divisions. I don't fault BP leaving.  Fiduciary responsibility has its dictates.  Arg.

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