L R AS Published on Sunday 3 May 2020 - n° 320 - Categories:various sectors
A round-the-world tour of PV disturbances caused by the virus
China, home to more than 70% of the world's wafer and solar cell production capacity, will increasingly feel the economic impact of the pandemic in the second quarter. As the disease worsens in Europe, North America, Southeast Asia and Latin America, foreign PV markets will be increasingly affected.
are expected to experience a gloomy second quarter, with no signs of a market rebound in the 3rd and 4th quarters.
Project construction in many markets has been put on hold. Although Europe and Vietnam have begun to lift containment measures, many factors such as travel restrictions and mandatory self-isolation on arrival or return are preventing developers from taking any short-term business trips.
In Europe, a member of SolarPower Europe said in early April: "covid19 is affecting industries across Europe. In the solar sector, there is a slowdown in demand. Projects are being delayed in the short term due to a reduced supply of materials and disruptions related to coronavirus.
Spain, Germany, Austria, Denmark and the Czech Republic have expressed their intention to lift restrictions on coronavirus. In 2020, the Netherlands is expected to increase its photovoltaic capacity by about 30-40% with residential, professional and ground-mounted rooftop installations.
Falling energy demand in Europe has led to lower electricity prices, which will be reflected in the LCOE, slowing down the development of renewable energy.
In the United States, many residential solar installers including Sunrun and Sungevity have laid off their employees. SunPower has stopped manufacturing panels to reduce its operating costs, and has eliminated its financial projections for 2020. Some small panel manufacturers in California have closed their doors.
The pandemic does not prevent investment and transactions from taking place in the local solar energy market. So IKEA is still investing. Lightsource BP has secured $250 million in financing for a 260 MW photovoltaic plant in Texas, and will build a 132 MW plant in Arkansas.
In India, the daily number of new patients is increasing, especially in densely populated areas. Companies have been forced to close down to comply with containment. The local media are concerned about the spread of the disease in rural areas, where the health infrastructure is fragile. The National Solar Energy Federation of India (NSEFI) said about 4 GW of ongoing projects have been delayed due to the late delivery of panels from China.
Vietnam has the fastest solar growth in Southeast Asia. It has recently published new tariffs. To benefit from them, developers must commission their installations before the end of this year. However, the pandemic is making it difficult for developers to move their projects forward: commercial negotiations can only be conducted by telephone or e-mail. They have difficulty moving forward because of issues related to signing the contract.
Supply chains disrupted
The Philippines, Malaysia, Singapore and Thailand have imposed national containment that lasts between two weeks and a month. This disrupts the supply chain, leading to the postponement or cancellation of ongoing PV projects.
Brazil is suspending photovoltaic auctions while the country is in recession. In Latin America, the imposition of measures to contain the pandemic and economic downturns are having unprecedented effects on photovoltaic markets. Indeed, the region is experiencing a drop in photovoltaic demand, as well as an increase in installation costs due to currency depreciation. According to the World Bank, the pandemic is expected to reduce the gross domestic product of Latin America and the Caribbean by 4.6%. Brazil, Mexico and Argentina are the three hardest hit countries.
The pandemic is affecting the construction of large photovoltaic projects in the Middle East, but the impact is relatively small compared to other markets. The various auctions in Saudi Arabia have revealed that the market is dominated by energy investors such as ACWA Power, Marubeni, Total... which appear several times in the final lists.
In Japan, South Korea and Australia, where strict restrictive measures were imposed at the beginning of the coronavirus epidemic, the construction of photovoltaic projects is still underway, despite a slower pace.
PV InfoLink of 21 April
