BP's solar business model: a case study on BP's solar business case and its drivers

Abstract

British Petroleum (BP) was among the first major oil companies to commercialise solar power technologies and was also one of the largest fully integrated photovoltaics companies. Following the oil crises of the 1970s and as part of its diversification strategy, BP built up its subsidiary BP Solar, which later became a central element in BP’s corporate social responsibility and sustainability activities. But in 2011, BP Solar was shut down. However, before this the company did indeed have a ‘solar business case’ and this paper shows how this business case was realised and how BP tried to keep it going. Sources used were BP’s annual reports from 1998 to 2011, which were studied by means of software-supported text analysis. For the reconstruction of the strategic drivers and business model innovations behind BP’s solar business, a framework from sustainability management research was employed. It was found that an accommodative solar strategy was applied by the company and implemented through two business model innovation paths, the optimisation of module manufacturing combined with completely new distribution models.