L R AS Published on Saturday 21 March 2020 - n° 314 - Categories:various sectors
Coronavirus could slow down the development of the solar sector
Until the emergence of the epidemic, it seemed that nothing could slow down the irresistible advance of renewable energies in the world.
Initially, it hit China, disrupting production. From a distance, it was difficult to perceive the damage that was taking place and its consequences. The concern then
seemed to be the supply of equipment: would there be enough panels, wind turbines and batteries for global demand to meet project deadlines given widespread plant shutdowns? Little by little, the issue of equipment supply is being resolved as Chinese factories resume production. The shortage experienced by some developers is probably limited.
After the spread of the epidemic in Europe and the United States, attention is now shifting to demand, as public opinion is beginning to think that a global economic slowdown will be inevitable.
Last week, BloombergNEF lowered its global solar demand forecast for 2020 by 9%. This could mean the first year of decline since the 1980s.
China has postponed its mega-solar auction to June. This will cause further delays. In addition, the inevitable recession could cause problems for solar manufacturers, as this is a highly indebted, low-margin business sector.
The problem will emerge if the economy takes a plunge: a lack of funding for renewable energy projects. In the US market, this could mean a shortage of fiscal equity. The nature of the renewable energy tax credits in the United States - the Wind TPC and the Solar TCI - makes developers dependent on a relatively limited number of investors willing to provide tax equity for projects. The availability of fiscal equity is a point of ongoing discussion and concern for renewable energy developers in the US, although the market has been healthy in recent years. This could change quickly in times of recession. "The question is, are we going back to 2009, when equity was limited? "says one professional.
GreenTech Media of 15 March
