LIPA contractor BP Solar to shut down

One month after activating the biggest solar-energy project in New York, a $298 million LIPA-funded array at Brookhaven National Laboratory, BP Solar confirmed Thursday it will exit the solar energy business entirely.

The company, a division of U.K.-based British Petroleum, cited "challenges" in the market.

Long Island Power Authority ratepayers are footing the bill for the project through a 20-year agreement valued at $298 million. In February, BP Solar entered into a contract with MetLife to be a joint partner, with BP responsible for operating and maintenance and MetLife serving as investor partner, holding a 90 percent stake, according to regulatory filings.

BP spokesman Tom Mueller said, "We will honor all commitments with regard to projects we are currently engaged with, including the LIPA project."

MetLife spokesman Chris Bresline said the company was "aware of the reports regarding BP Solar. . . . However, we remain committed to our investment in the Long Island Solar Farm."

Michael Deering, vice president of environmental affairs at LIPA, said the authority had not been formally notified of BP Solar's decision to exit the business, but said BP had given notice in the past that its ownership of the project could be transferred. Either way, he said, LIPA ratepayers are protected.

"They [BP] are a committed partner in this business in that they have fully developed the solar arrays," Deering said, adding that the project was installed successfully and is working. The contract with BP, called a power purchase agreement, "anticipated the potentiality of a new owner or operator," Deering added, with "all obligations and responsibilities fully transferable. It will continue to protect our customers, ensuring that we get the energy."

A spokesman for Brookhaven National Lab, where the 164,312 solar panels were erected on 200 acres, declined to comment, referring questions to BP.

"This decision was very difficult given the company's nearly 40-year history in solar energy," another BP spokesman, Daren Beudo, said in an email. But global solar markets are experiencing "tremendous challenges, which ultimately led the company to make this decision."

Cheap solar panels from China have flooded the U.S. market, lowering installation prices and threatening domestic panel makers.

In its statement, the company said it will complete "key projects currently in development and take the steps necessary to transition its obligations and some assets to other BP businesses or to third parties as required." That would presumably include the warranty on the LIPA solar panels.

BP Solar's workforce, once 1,600, will "gradually wind down," BP said.

The sprawling solar array at Brookhaven has the capacity to provide up to 32 megawatts of power, but it required removing trees from some 150 acres of undeveloped land on the federal property in Upton. The partners said the benefits of solar production would eventually outstrip the natural benefit of the trees.