What does Coronavirus have to do with solar? You may be asking this question and my simple answer is a lot! Coronavirus, just like how any other virus behaves in the body—spreads around fast and if not checked can make every body organ fail—that’s exactly where we are with the Coranavirus Disease (COVID-19).
Coronavirus is spreading like the Australian 2019 fire storm, hitting almost every aspect of the global system and sector—the solar panel market included.
The prices, supply and production of solar panels are expected to tumble in the wake of the deadly coranavirus outbreak.
So what’s this virus? The COVID-19 is basically a respiratory disease initially discovered in China, and has so far led to 142,539 reported cases and affected several countries including the United States, as reported by WHO. Australia has now exceeded 250 cases, primarily in New South Wales.
Over 5,393 Coronavirus related deaths have been reported worldwide. According to The New York Times, the disease has so far killed forty one people in the United States and three in Australia.
While the main concern is the ultimate health and wellbeing of the world’s population (experts say the COVID-19 has the capability to wipe out 70% of the world’s population), it’s undeniable that Coronavirus is already wreaking havoc on most stock markets and global economies—the solar industry is not exempted.
As the disease continues to spread more rapidly, the U.S. stock market has unfortunately dipped to its lowest points since 2018. Experts in the sector are afraid that the prices of solar and stocks could as well be affected sooner than later.
How COVID-19 has affected Solar
China has been on a mandate lock down in a bid to help stem the spread of the terrible disease. As such, manufacturing companies and plants remain closed or less staffed and this includes the solar panel manufacturing businesses.
Most of the solar panel production in Australia, the United States and the rest of the world is exported from China. For several weeks now, people have been restricted from going to work, though they are slowly reporting back.
However, most manufacturers won’t operate at full capacity just yet and this is bound to delay or slow down production targets. Modelling out of the U.S. give Australia an indication however confirmed data is yet to become available.
Clark Sackschewsky, national leader of Natural Resources practice at BDO
“If you look at it 60 to 70 percent all solar production comes out of China. So if China is closing manufacturing facilities, this means fewer exports in all industries. The solar panel industry will be affected greatly.”
When production is slowed down, it causes delays of products, increased solar panel prices and installation companies not being able to perform their work. Battery production will also be affected considering that China is the main producer of batteries.
The top solar manufacturers in China include China Sunergy, Trina Solar, JA Solar Holdings, Suntech Power and Canadian Solar.
When reached for comment, Trina Solar remained unresponsive and so were the Canadian Solar and Suntech Power at the time of publishing this article.
Stock market volatility
In a bid to safeguard the entire stock market, on March 3 the Federal Reserve slashed the interest rates, a move that caused the stocks to momentarily rebound, before dipping again.
These stock market reactions emanate from China’s influence of the global economy. Even the most established American firms are staring at huge potential losses. Late last month, Apple reported inability to reach its quarterly projections owing to manufacturing problems in China.
“The solar industry will be in lockstep with everyone else being affected,” Sackschewsky said.
“If you have a supply chain or do business with China it’s affecting the top and bottom line,” Sackschewsky said. “An adjustment will be expectations there’s nothing a business can do to protect other than seek a new supplier, and that may affect the cost.”
Solar Panel Prices expected to rise
The COVID-19 outbreak in China has led to a shortage in module glass and solar wafers, and consequently making it harder to create solar panels. This being said, solar panel prices will be volatile in the current economic market. Businesses that wish to complete their solar installations right on time or had scheduled to install rooftop solar for homeowners in a span of three months just before summer sets in can expect a climb in demand and prices.
According to Sackschewsky, this situation could evolve into long delays for residential solar projects, compelling companies to stringently manage their cashflows as the coronavirus outbreak continues to spread.
Alternative solar panel options
The outbreak of the COVID-19 in the United States is thankfully, still in its infancy stages as the various authorities do everything possible to combat it. While it’s still unknown how the dangerous virus will affect production in the U.S., there are a few local options the country can choose for solar panel production.
Some of the solar companies like Tesla and Panasonic have built a plant in Buffalo, NY, Mission Solar has one in San Antion, TX, while Solar Tech Universal has a facility in Riveria Beach, FL, just to name but a few that boast huge footprints across the United States. But again, as the demand for solar increases, prices could soar.
What the Australian solar panel companies can do to weather the Coronavirus storm
According to Solar energy insights shared by SolarMagazine.com, there’s absolutely nothing the Australian solar companies can do about the issues surrounding supply chains from China, but there are steps these companies can undertake internally in order to safeguard themselves against possible backlash that may be caused by the virus as long as it continues to linger on, Sackschewsky reported.
For the moment, solar companies in Australia can temporarily switch to other local solar system suppliers. They should also expect some projects to delay and hence prepare to refinance and alter their schedules accordingly.
On the other hand, residential solar companies may be forced to sink deeper into any solar panel supplies already received and change customer expectations with regards to the duration it would take for their home solar array to be installed.
And when it comes to workers, companies should ask their sick employees to remain at home and order employees who may have traveled to countries with the outbreak to self-quarantine for at least 14 days upon return.
How will it end?
So now that various sectors including the solar panel industry have been infected by COVID-19, how will it all end?
Thankfully, the rapid spread of the virus seems to have slowed down and workers in China are being ordered to go back to work. Unfortunately, there’s so far no vaccine or treatment for the disease, but the pharmaceutical companies around the globe are working tirelessly to develop and produce one soonest.