BP Solar ends Md. manufacturing, cuts 320 ujobs

By DAVID DISHNEAU Associated Press Writer

HAGERSTOWN, Md. (AP) - BP Solar said Friday it is closing its landmark Frederick manufacturing plant as part of a reshaping of the U.S. solar industry in a cost-cutting move that will eliminate 320 jobs.

The company, a San Francisco-based unit of London-based BP PLC, said the sharply falling price of solar-power modules prompted it to shift its remaining in-house production to lower-cost joint ventures in China and India and contract with other manufacturers for the rest.

About 110 jobs in sales, marketing, research and project development will remain in Frederick, housed for now in the prominent slant-roofed building along Interstate 270 about 40 miles from Washington, spokesman Pete Resler said.

The company said solar panel prices have fallen nearly 50 percent in the past 18 months. The price drop has driven the consumer cost of solar power closer to that of electricity generated from fossil fuels, said Chief Executive Officer Reyad Fezzani.

He said that with global demand for solar power expected to boom in coming years, "we are scaling up our supply chain to serve this rapid growth here in the US, in the European and Asian markets."

In 2009, BP Solar announced its global sales rose more than 26 percent. The company said it expects sales growth exceeding 50 percent in 2010.

BP Solar said it is increasingly focused on developing utility-sized projects. Fezzani said about 70 percent of solar industry jobs are in design, installation and maintenance. As a major project developer, BP Solar will help create hundreds of these new jobs, he said.

Still, the company's announcement was "a big hit" to Frederick's economy, said state Sen. David Brinkley, R-Frederick.

"They're obviously going to be making the solar cells somewhere, but they're choosing physically to relocate and not be here, and that's indicative of, I guess, the environment - the business environment and the economy," Brinkley said.

Solar-cell manufacturing in Frederick dates to the mid-1970s, when Hungarian expatriates Joseph Lindmayer and Peter Varadi established Solarex. The company, housed in the plant topped by a huge, slanted, solar-panel array, became the nation's largest U.S.-owned solar cell producer by 1994, when then-owner Amoco Corp. sold a 50 percent share to Enron Corp.

BP acquired Amoco in 1998 and bought Enron's share a year later.

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Associated Press writer Brian Witte contributed to this story from Annapolis.