BP Invests $200 Million Into Solar Energy Development Firm

BP is one of the first major oil and gas corporations to invest in renewable energy, but projects like BP Solar failed to take off when solar panel production costs decline. 


May 28 2019, Updated 5:52 p.m. ET

BP is diving into solar energy with a partial acquisition of Lightsource. The oil and gas corporation will put in $200 million over the next three years and will obtain a 43 percent equity share. Lightsource will be rebranded as “Lightsource BP” and the investment will focus on the long-term development and management of solar projects.

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Lightsource is the biggest solar energy developer in Europe and is looking to expand worldwide. Considering that they currently hold a capacity of two gigawatts worldwide (1.3 gigawatts commissioned), further large-scale solar projects are estimated to quadruple that amount.

“Not only does this partnership make strategic sense, but our combined forces will be part of accelerating the low-carbon transition,” Nick Boyle, CEO and founder of Lightsource, said in a press release. “Solar power is the fastest growing source of new energy and we are excited to be at the forefront of this development.”

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One notable project Lightsource oversees is Europe’s largest floating solar farm just outside of London. The 6.3-megawatt project sits on the Queen Elizabeth the Second reservoir. Elsewhere, Bentley Motors factory also installed 20,000 solar panels on their rooftop in 2013, featuring a capacity of five megawatts and was one of the United Kingdom’s largest solar rooftop systems at the time.

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This isn’t BP’s first venture into the solar industry. BP Solar was a subsidiary that installed photovoltaic solar panels, originally founded back in 1981. They had to close things up six years ago after solar cell production costs fell rapidly. It wasn’t feasible to continue manufacturing, so they ended up having to close many plants in the summer of 2011. 

Why invest into solar now as costs continue to decrease? BP isn’t investing into hardware directly as they were in the past as Lightsource doesn’t create it. Instead, they develop and manage projects. Purchase power agreements have created a way for corporations to receive guaranteed money from their investments.

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Notably, BP was one of the first major oil and gas corporations to invest into renewable energy. These new investments will add to their Alternative Energy portfolio. “BP Wind Energy” currently maintains a capacity of 2.3 gigawatts worth of onshore wind farms. “BP Biofuels” generates low-carbon energy for Brazil’s electrical grid.

$50 million will be given to Lightsource once the deal is completed in early 2018 and the rest of the money would be spread out over the next three years. BP anticipates that the solar industry will represent one-third of total renewable power worldwide by 2035.

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