BP's Solar Business Model - A Case Study on BP's Solar Business Case and Its Drivers

Abstract

It is often overlooked that British Petroleum (BP) was among the commercial solar energy pioneers and one of the largest fully integrated photovoltaics companies. Following the 1970s oil crises, BP built its subsidiary BP Solar. But in 2011, in the wake of changing policy regimes, falling module prices and fierce competition, BP Solar was closed. However, before these developments occurred the company had a “solar business case.” This paper shows how this business case was realised and how BP tried to maintain it. BP’s annual reporting from 1998 to 2011 was studied by means of software-supported text analysis. A framework from sustainability management research structured the re-construction of the strategic drivers and business model innovations behind BP’s solar business. It is found that an accommodative strategy was applied and realised through two business model innovation paths, i.e. the optimisation of module manufacturing combined with completely new distribution models.

Keywords: British Petroleum, BP Solar, solar energy, business case for sustainability, management, business model, strategy, innovation, case study, content analysis

JEL Classification: Q40, Q42, Q20, Q25, M10, O30, A22, A23