The Federal and State Governments have been handing out millions of dollars a year in subsidies for solar technology for households and business, but it hasn’t been enough for BP Solar, part of the BP energy group.

It announced on its website today that it was closing its Sydney manufacturing centre and moving it offshore to a lower cost place of business.

There was a hint in the statement that the company found it hard to expand at the inner western Sydney location, and that there was no real interest from the embattled NSW Labor Government. Global CEO of BP Solar, Reyad Fezzani said:

We’ve looked at all options in our Sydney manufacturing site and the physical location, lack of expansion potential and lease agreements just don’t make it competitive: the most modern Solar PV manufacturing plants are up to twenty times larger than our Sydney site and we are competing in this global market.

Location and lease agreements would be state government responsibilities, especially the latter. The Labor Government controls Sydney Olympic Park and has recently committed itself to spending $25 million to build a racetrack around the precinct to handle V8 Supercars.

State and Federal Government’s have made a big play about the importance of solar energy to lowering green house emissions: there has been a lot of “hot air” spoken about how we could have a green manufacturing revolution and a move for local industry into this business.

But obviously not when we can’t hold or do any deals to hold an existing business in this newish area of manufacturing, but we willingly agree to fork out $6.2 billion over 13 years for the car industry, a prime carbon-emitting group of businesses.

In its statement BP Solar said:

BP Solar announced today that it will cease the production of solar photovoltaic (PV) power cells and panels from its manufacturing plant in Sydney Olympic park (Australia) at the end of March 2009. The decision comes because the company is looking to focus its operations at larger scale plants in lowest cost manufacturing countries, in order to drive down the cost of solar power for consumers.

The BP Solar sales and marketing team in Australia will continue their activities, and aim to grow the sales and servicing of solar products. However, BP Solar regrets that approximately 200 jobs will be lost from the manufacturing plant.

“The challenge for solar power is to reduce its costs to the level at which it competes on an equal footing with conventional electricity delivered through the power grid. To do this we need to expand at scale and reduce costs.” says global CEO of BP Solar, Reyad Fezzani.

Peter Fray

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