Challenges could threaten a number of projects and businesses across the globe
Data analytics firm GlobalData says the COVID-19 outbreak has had a significant impact on Chinese solar photovoltaic (PV) manufacturing companies and thus the global solar PV chain.
According to a report, developers are not only facing component supply disruptions such as inverters and panels, but also labour shortages, as quarantine measures are being implemented to contain the virus’s transmission.
Somik Das, senior power analyst at GlobalData explains, “Many solar PV developers in Asia and other parts of the world have experienced prolonged delays in importing solar PV modules and other related supplies. The global solar PV value chain is particularly affected because the manufacturing capacity of countries is concentrated in a few major markets such as China, the US, Taiwan and Japan. Most of these nations have been impacted by the pandemic. In addition to this, many of the developers around the world are dependent on the Chinese manufacturers to provide the PV modules.”
Das adds, “The shortage of equipment and labour is not only confined to major markets such as China, the US, Japan and the UK, but also in other upcoming solar markets such as Australia, France, Spain, Taiwan and Malaysia. Since the initial implementation of tariffs in 2012, the US has slowly diversified its panels procurement base from being overly reliant on China to Malaysia, South Korea and Vietnam among others. However, with the pandemic impacting the aforementioned countries, the procurement supply chain of major markets like the US and several European countries, from these countries, is going to be negatively impacted. This in turn will cause major delay to the projects in the pipeline.”
Due to the COVID-19 outbreak, the global solar industry is facing several challenges, which are said to be strong enough to threaten the survival of various businesses and developers within the developed markets across the globe, GlobalData says.
“With challenges in procuring equipment and labour shortages, companies with long-term harboured projects are expected to face a great deal of inconvenience, increasing their exposure to risks and liabilities. However, the pandemic has taught the industry the negative aspects of being overly dependent on any one nation as a base for supplying components. Moving forward, major players in the developed economies will surely understand the importance of housing the components manufacturing units within the nation, which in the long run will significantly reduce the overdependence on other markets, and also reduce the negative impact of similar crisis situations, on the country’s solar sector,” Das states.