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BP Shuttering U.S. Solar Plant

BP is closing down its U.S. solar plant and moving manufacturing jobs to Asia, in another capitulation by the alternative energy industry to the manufacturing realities of the world.

FREDERICK, MD. (

TheStreet

) -- BP Solar, the solar panel manufacturing subsidiary of British petroleum giant

BP

(BP) - Get BP Plc Report

, is shutting its solar panel plant in Frederick, Maryland and laying off 320 plant employees.

BP's move is another sign of the disconnect that exists between the political rhetoric in Washington D.C. to link green energy's development to U.S. job growth, and the reality of globalized manufacturing and, in particular, the drastic reductions in solar module prices in the past year.

New York Senator Charles Schumer recently introduced legislation to cut off funding to alternative energy projects in the U.S. that don't serve as a significant source of U.S. job growth. Schumer has taken aim specifically at a wind power project being developed by

A-Power Energy Generation Systems

(APWR)

. In response,

A-Power has announced plans to construct a wind turbine plant in Nevada and has lined up the support of Senator Majority Leader and Nevada Senator Harry Reid.

Analysts have argued that in the case of wind power, the size of turbines and towers makes it more logical to manufacture domestically, while the relative ease of shipping solar modules continues to argue for the outsourcing of solar manufacturing to Asia.

Even

Evergreen Solar

(ESLR)

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, which received a big paycheck from the state of Massachusetts to set up a plant in the state, has since capitulated to the reality of globalization and

Evergreen Solar is moving a large portion of its manufacturing to China.

The Evergreen example, in fact, may be the starkest example in the reality of manufacturing trends: it costs Evergreen less to pay workers in China to manufacture solar components and ship those components back to the U.S., then to have a state-of-the-art robotic assembly line in Massachusetts complete the brunt of the manufacturing.

It was a little over three years ago that BP and Maryland state officials hailed the $70 million plant as a green-jobs winner. Last Friday, BP said it would save up to 45% in costs by closing the plant.

"We remain absolutely committed to solar," BP chief executive Tony Hayward told the

Washington Post

about the plant closing, but conceded that BP was "moving to where we can manufacture cheaply."

BP is planning to destroy the plant, as it is unable to sell or lease the building. The site of the BP Solar plant being destroyed, only three years after it was hailed as a new day in green energy job growth, will not only be a devastating image for the laid off workforce, but for the overly simplistic rhetoric of alternative energy and U.S. job growth.

Ontario's new feed-in tariff scheme requires a portion of a solar project to be domestic content, but that can include the labor itself, and it is the on-the-ground solar installation jobs that truly cannot be outsourced to Asian countries. Ontario has also offered a particularly good deal to

Samsung

and its solar unit for moving created a manufacturing base in Ontario.

Meanwhile,

the U.S. government's hemming and hawing over a consistent long-term alternative energy policy contradicts its demands for alternative energy companies to keep manufacturing in the U.S.

The latest indications out of Washington are that with health care reform done, the legislative powers that be will be moving on to financial reform, and the once-hot issue of carbon cap-and-trade is likely to remain dormant -- and a Congressional doormat.

The federal cash grant program that has stood-in for tax equity investors in providing the interim financing for alternative energy projects in the past year is set to expire at the end of 2010 -- though projects started before then still qualify for a three-year grant period.

BP noted in announcing the solar plant's closure that U.S. sales in 2009 were flat. BP has struggled among solar firms in the U.S., dropping to 15th place among competitors in the past year, according to the

Washington Post

report.

BP said it will move manufacturing of its solar components to Chin, India and other countries. China and India have been more consistent in their government support for long-term alternative energy growth. India has already introduced a national feed-in tariff and

China is expected to introduce a solar feed-in tariff soon.

-- Reported by Eric Rosenbaum in New York.

RELATED STORIES:

>>A-Power Flexes its Political Muscle

>>China's FIT May Hinder Thin Film

>>Evergreen Solar: Know When to Hold

>>Alternative Energy Q&A: Siemens Energy Americas CEO

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