BP has paid $200m (£149m) for a 43% stake in Europe’s biggest solar developer, marking its return to the sector from which it withdrew six years ago.
The investment in the London-based Lightsource marks a turnaround for the British oil firm, which rebranded as Beyond Petroleum in 2000 but shut its alternative energy headquarters nine years later.
“We’re excited to be coming back to solar, but in a new and very different way,” said BP’s chief executive, Bob Dudley.
Dev Sanyal, the firm’s chief executive for alternative energy, said BP was returning to solar because the sector had matured and the model had shifted from manufacturing panels to developing solar farms.
“[Solar] is really an important part of the overall energy mix. It will constitute around 10% of global power in the next 20 years and is growing around 15% per annum. We like the fundamentals of the industry and we like the fundamentals of the company,” he said.
The solar firm will be renamed Lightsource BP and BP will take two seats on the company’s board.
Nick Boyle, founder and chief executive of Lightsource, said in many countries solar had moved from relying on government support to being able to compete on its own.
“In the last couple of years, we’ve hit that interesting inflection point where unsubsidised solar has become a direct competitor and something that actually beat other forms of electricity generation,” he said.
“Whereas before the market was very different and needed support, now we are in a completely new world.”
The company will focus on building solar projects in the US, India, Europe and the Middle East.
While the $200m stake is a small fraction of BP’s $15bn-17bn total spend this year, Sanyal said it was a substantial investment. The company employs 8,000 people in its alternative energy business, which is mostly centred on wind power in the US and biofuels in Brazil.
Asked if the investment marked a return to the Beyond Petroleum strategy pushed under the former chair John Browne, Sanyal said: “We want to play our full role in the low carbon transition.”
BP is not alone in diversifying away from oil and gas. The Anglo-Dutch firm Shell has been buying electric car infrastructure companies, France’s Total has been acquiring battery storage firms and Norway’s Statoil is pioneering floating windfarms.
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