With COVID-19 Pandemic, Global PV Installation Is Predicted to Drop by 18% YoY in 2020

published: 2020-04-20 19:30 | editor: | category: News

In order to contain COVID-19, governments of nations gradually promote work from home or directly impose home-quarantine orders. These moves put many construction and development projects to halt. In light of these developments, the renewable energy consulting firm, Wood Mackenzie expressed that global solar installation is expected to fall by 18% YoY in 2020.

Wood Mackenzie reduced its PV installation prediction from 129.5 GW to 106.4 GW in 2020. Meanwhile, it lowered the prediction for energy storage installation by 19%. A senior PV analyst of Wood Mackenzie, Tom Heggarty, pointed out that the PV industry might face harsh challenges in 2021. The COVID-19 pandemic and oil price's plunge will continue to negatively affect the solar industry in 2021. The global economy might slide into recession.

According to Heggarty, even if the global economy were to recover in 2021, the PV power plants that are planned to finish grid connection in 2021 are still developing and financing right now. In other words, when the macro economy is suffering in 2020, the solar power plants' schedule might not follow their original plans. According to Wood Mackenzie's estimation, the global PV installation quantity in 2021 might slightly decrease from 127.2 GW to 123.6 GW, down by 3% YoY.

The pandemic hurts each country in a different scale. Every nation's PV industry faces different challenges. As Wood Mackenzie stated, China was the earliest epicenter of COVID-19, but now China's economy is recovering. Its si wafer, PV cells, and PV modules shipment levels almost returned to pre-COVID-19 levels. China's PV market is projected to return to normal levels in 2Q20. By contrast, in Europe and North America where the pandemic hasn't de-escalated, the spread might continue suppressing PV installation quantity until 2Q20 or 3Q20.

Heggarty expressed, for now, tenders for renewable energy power plants are postponed, power purchase agreements (PPA) negotiation is halted, permission issuance is delayed, electricity price is sluggish and the loss from currency depreciation is probably huge. All these reasons above cause investors to become more conservative when investing.

As for solar installation quantity in 2020, each market intelligence firm has a different opinion. Rystad Energy previously predicted that newly-added PV installation might reach 140 GW, and that of wind power generation might come to 75 GW. PV installation might grow by 15% YoY, and that of wind power might increase by 6% YoY. However, due to COVID-19, the PV installation growth might stay flat in 2020.

Bloomberg New Energy Finance (BNEF) is more optimistic. It only lowers the prediction for global solar installation quantity from 152 GW to 143 GW in 2020.

(Photo credit: pixabay)

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