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BP Solar Scraps Maryland Factory Expansion

Written by Ucilia Wang

BP Solar [a subsidiary of <b>BP</b> <span class=" TICKERFLAT">(<a href="/quote/BP.html">BP</a> - <a href="http://secure2.thestreet.com/cap/prm.do?OID=028198&amp;ticker=BP">Get Report</a><a class=" arrow" href="/quote/BP.html"><span class=" tickerChange" id="story_BP"></span></a>)</span>] has canceled a $97 million plan to expand manufacturing in Maryland, citing increasingly intense competition in the global market.

The solar company, which makes, installs and operates solar-power systems for homes and businesses, told Frederick County officials [last week] that it still plans to complete the building that was meant to house a new silicon ingot factory. But BP Solar will use the building as office space and a warehouse instead, said Tom Mueller, a spokesman for BP Solar.

The solar company won't be spending the $67 million it had set aside for buying equipment and outfitting the interior of the factory, Mueller said, adding that the competition among solar-panel makers is getting too intense.

"It's really about the competitive space that solar operates in today," Mueller said. "It's a highly competitive market right now in manufacturing side. It's growing more so with new players [from Asia] entering the space, with lower-cost manufacturing."

The company expects to finish building the $30 million, 140,000-square-foot space next year. Employees from two BP's offices in the same county will move into the new building. The new building is located at the company's North American headquarters, where it also makes solar cells and panels.

The company broke ground on the factory project in July 2007, and expected to nearly double its silicon-ingot production capacity to 150 megawatts. BP said at the time that the new building would have enough space to grow its ingot and wafer production to more than 400 megawatts later.
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