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BP Solar shutters U.S. plant to lower costs

BP Solar says it will close a Maryland solar panel manufacturing facility in search of lower costs, as other U.S. manufacturers struggle in the face of higher international competition.

The solar power division of energy giant BP said on Friday it plans to close its Maryland manufacturing facility, a sign of the heightened international competition in solar.

Martin LaMonica/CNET

BP Solar opened a facility in Frederick, Md., three and a half years ago to make solar panels but decided to find locations where it can "manufacture cheaply," BP CEO Tony Hayward told The Washington Post. The move will result in 320 lost jobs. BP Solar will retain about 100 people to work in research and development, according to reports.

Although demand for solar panels is generally strong, solar manufacturers face steady price declines, due to growing international competition and falling price of silicon, which is used to make most solar cells.

"A few years ago conditions were different," BP Solar CEO Reyad Fezzani told The Washington Post. "The margins were healthier. There was a shortage in the market. But since then, the market has changed. We just couldn't make the economics of this factory work."

Massachusetts-based Evergreen Solar, which was provided incentives to manufacture in the U.S., recently said that it intends to move its panel-making operations to China because of costs.

Many executives in solar and clean-tech businesses say that a national policy to promote domestic manufacturing is needed for the growth of energy-related industries, such as wind, solar, and batteries. Not all solar companies are moving outside the U.S., though: Yingli Solar of China, Schott Solar of Germany, and Kyocera Solar of Japan are planning to open facilities in the United States, The Washington Post noted.