In the United States, Dr. Anthony Fauci has called for a federal stay-at-home order. Nearly 10 million jobless claims have been filed in the last two weeks. The global economy has been in a state of mass hysteria, resulting in the stock market plunging and the temporary reformation of global business strategies to overcome the consequences of the coronavirus outbreak.
Effects on Solar Industry
As many of you know, China is the epicenter of solar equipment production and manufacturing. With China being out of commission, some areas of the solar market have slowed tremendously. Major cities vacant where citizens are under mandatory self-quarantine. As a result, offices and factories have emptied and most business operations have effectively come to a temporary halt.
Many distributors and module manufacturers who source materials from China have delayed operations and have started shifting business strategies to compensate for obstructions in their supply chains; such is the case of safe-harboring.
Safe-harboring is a practice by U.S. solar developers that essentially reserves large volumes of solar equipment before the solar tax credit is stepped down, but the project installation and reception of equipment is after that time.
According to Greentech Media, some industry watchers predict that companies will be pressed to deplete their module supply storage or make force majeure claims on some projects. United States solar developers may need to make costly decisions in changing project timelines and frugally managing their cash flow. The shortage of staffing and materials in Chinese factories may result in higher prices as demand increases while supply stagnates or potentially depletes.
The following is a list of reports presented by Bloomberg Green:
On 2/24, a Manila Electric unit said two solar projects will be delayed for months as solar panels were stuck in a factory in Hubei.
China’s New Energy Chamber of Commerce said earlier this month that production had been disrupted and will impact shipments of equipment to overseas markets. Its members include leading panel makers JinkoSolar Holding Co., Tongwei Co., LONGi Green Energy, and Trina.
Trina’s deputy general manager, Yin Rongfang, told the Economic Times on 2/20 that its factories had lower supplies than usual, boosting short-term logistics costs. Factory utilization took a hit but is rebounding.
PV production capacity has been hit in Jiangsu province, where more than 60% of China’s solar panels are made, according to the Gofa Institute, a section of the government’s National Energy.
In France, Clair Waysand, interim chief executive officer of the utility and developer Engie SA, said coronavirus will delay some solar and wind projects by “a few weeks” since some suppliers of PV panels are Chinese.
Some companies have been able to manage the effect of the outbreak and to satisfy solar module demands. A Tier 1 leader, LONGi Green Energy Technology Co., claims that “it sees no significant impact on its panel sales and production as it kept shipment targets for the year unchanged.” The same is expected for other Tier 1 solar companies and larger solar corporations that have a reliable production infrastructure in countries outside of China.