How is COVID-19 affecting the solar market?
In 2019, the global solar market saw its most significant period of growth to date. Businesses and homeowners across the globe finally began to recognise the multitude of advantages solar has to offer. With its affordability and wide-reaching environmental benefits, PV power became exceptionally popular.
However, the current outbreak of coronavirus (COVID-19) has impacted every corner of every industry, and solar is by no means an exception.
With a large proportion of solar equipment manufactured and shipped from China, it is clear to see how the supply chain has been affected. SegenSolar discusses the impact COVID-19 has had on the PV industry and steps to improve the situation going forward.
What is the current status of the solar industry?
While the social and economic situation in China has improved drastically in recent weeks, the country’s factories are not yet operating at full capacity. The outbreak has served as a stark reminder of China’s significance in the global supply chains involved in promoting renewable energy. As such, there have been substantial delays and cancellations to solar product orders worldwide. Fundamentally, production rates for essential materials have halted.
On the 16th of March, JinkoSolar and Canadian Solar saw their stock prices fall by double digits.
Global solar companies are facing not only disruptions to supplies of components such as panels and inverters but are also feeling the pressure of labour shortages. With many businesses mandating remote working or simply disallowing employees from coming into work, there have been vast gaps in the workforce in warehouses and factories. These measures are, however, crucial to limit exposure to and contain the spread of the illness.
What’s more, each country is at a different stage of contracting and dealing with the virus, meaning it is incredibly difficult to predict the future of the industry. As an example, Italy saw an 8.1% weekly decrease in demand for electricity following the government’s enforcement of national house arrest and closure of non-essential businesses.
Regarding the residential solar market, homeowners are anticipated to put investments such as solar on the backburner until there is more financial certainty.
As well as delays to shipments and the manufacture of solar products, the industry has seen an increase in panel prices with these costs predicted to rise further. The surge is due to a shortage in the glass and wafers required to create the equipment. The news will come as a blow to many as solar had recently reached its most affordable price yet.
However, while the impact is by no means minimal, the industry is in a capable position to recover fully.
How has the outbreak affected load shedding?
For South Africa’s population, load shedding is unlikely to come to a standstill as a result of the global pandemic. If anything, the coronavirus is causing even more strain on power supplies.
Eskom has continued to urge South Africans to use electricity sparingly in the hope of increasing generation capacity and easing load shedding where possible. A spokesperson from the power utility has said that Eskom does indeed have a plan to deal with the virus and that it will follow guidelines issued by the national health department.
Workers have been asked to stay at home if they are able to work remotely, and all face-to-face meetings have been cancelled unless critical. Eskom has also said it is in the process of providing protective clothing, sanitisers and other measures for staff who need to be in the workplace.
How should you respond?
Clark Sackschewsky, national leader of BDO’s Natural Resources practice, recently stated solar companies in South Africa should consider sourcing stock from local manufacturers where possible. It is also crucial to recognise projects will experience delays and work will be required to adjust schedules and funding accordingly.
On a more granular level, the government has issued salient advice on how to help contain the illness. Taking heed of the following information will ease the burden on hospitals, the vulnerable and the economy in the long run:
- Wash your hands regularly or use hand sanitiser in its place if you are unable to wash them.
- Avoid crowded places and leaving the house unnecessarily to limit contact with others.
- Try not to touch your mouth, nose or eyes with your hands.
- Cough only into the crease of your elbow or a tissue rather than into your hands.
- Stay at home if you are feeling unwell.
For more information, visit the official government website.
Still unsure how the current situation will affect any orders from SegenSolar? Get in touch with a member of the team who will be happy to assist you.