COVID-19 Hits Solar Energy IndustryBy Dalia Maria de León | Mon, 03/23/2020 - 16:31
China is the world’s primary supplier of solar cells and panels and is also a major source of inverters and racking system components. About 80 percent of the specialty glass used to manufacture solar panels comes from China.
Last week, Star Tribune published a story about how COVID-19 has disrupted the global solar panel supply chain at installations in Wisconsin. Supply-chain interruptions have come after factory shutdowns and travel restrictions to and from China, highlighting the major role that this country has plays in the solar supply chain. According to this article, China’s leading position in the world´s solar supply chain is thanks to the country’s decision to buy solar companies and to invite others to move to China, where they found cheap and skilled labor. Rather than paying taxes, these companies are receiving tax credits.
However, the COVID-19 outbreak has slowed down China’s economic growth. The International Monetary Fund has cut China’s GDP growth outlook by 0.4 percent and has also alerted of further risks. The country’s renewable power sector is experiencing the impact of the COVID-19 pandemic, specifically in the wind and solar PV sectors, which could lead to lower capacity additions in 1Q20 due to suspended manufacturing and construction works.
According to Natural Energy Hub, most of the Top 10 solar panel producers are based in China. These include companies such as Jinko Solar, Trina Solar, LONGi Solar, Risen Energy and Suntech. COVID-19 has also hit the Zhejiang province, home to a few of Jinko Solar’s and JA Solar’s operations. Provinces such as Jiangsu took a hard blow in terms of solar PV production capacity, which is a matter of concern because more than 60 percent of the country’s solar PV panels are made in that province.
Considering the magnitude and impact that the COVID-19 outbreak could cause, the solar power market worldwide has concerns regarding material supply shortages and logistical restrictions, which could also increase the price of solar panels. The shortage is already delaying equipment deliveries and affecting the solar sector’s global supply chain. According to Star Tribune, the US is highly dependent on solar panel production from China, which is forcing US developers to look for alternative sourcing avenues.
In Mexico, the sector depends on China’s supply as well. Due to the project slowdown of the past year, the country has not experienced supply bottlenecks, yet. However, it is a matter of time before the sector runs out of spare components and new panels.