The COVID-19 pandemic served as a watershed moment for a dramatic year 2020. By disrupting global supply chains and industrial developments, the pandemic has made its presence felt in practically all aspects of life, with the PV industry being no exception. The pandemic’s impact is reflected in the slightly reduced newly installed PV capacity this year. Energy research consultancy Wood Mackenzie forecasts a yearly newly added global PV capacity of 115GW for 2020. Although this figure surpasses the 100GW-mark, it falls short of the 118GW added in 2019.
The latest reports from Wood Mackenzie indicate that, in spite of the ongoing global health crisis, the demand for solar energy has not seen a decline this year. In fact, global solar energy demand this year is a 5% increase from last year, resulting in 115GW of forecasted newly added PV installation capacity for 2020. Wood Mackenzie analyst Ravi Manghani believes that the worst of the pandemic’s impact is now over, since practically all countries/regions have ended their lockdown measures (at the time of writing). Although most PV power stations saw interruptions in their service schedules this year, they are now free to resume normal operations.
IEK Consulting, a subsidiary of Taiwan-based ITRI, likewise forecasts a decline in PV installation capacity this year. IEK further states that ground-mounted PV equipment comprises the majority (more specifically, 61%) of this newly added capacity. At the same time, there has also been a noticeable increase in household PV equipment this year, accounting for 14% of all applications. A similar increase in the penetration rate of distributed PV equipment took place as well.
In particular, although the PV industry in China experienced some setbacks owing to the “531 New Deal” instituted the Chinese government in mid-2018, the industry has by now adjusted itself accordingly and seen an increase in installation capacity. Wood Mackenzie expects newly added PV capacity in the Chinese market to reach 39GW this year, with 27GW of capacity installation taking place in 2H20. Manghani states that various unsubsidized PV projects and PV bids have taken place in China throughout the year. Although the pandemic has resulted in a short-term inability for suppliers to purchase PV modules, the Chinese PV market is still expected to grow by 30% YoY in installation capacity in 2020.
Trailing behind China is the world’s second-largest PV market, the U.S. PV market. The household PV sector in the U.S. experienced a 23% QoQ decrease in installation capacity due to continuous stay-at-home orders; non-household PV capacity, on the other hand, dropped by 19%. However, the development of utility-scale PV plants remains unaffected by the pandemic, while component shortages and the ensuing installation delays in the distributed PV market can be overcome by online purchases or other sales channels.
The U.S. market is expected to continue growing in the future, if only because of the installation upturn brought about by the ITC (solar investment tax credit) in 2020, but after the upturn fades in the future, the growth momentum in this market will subside as well.
The Indian PV market, in comparison, suffered considerably as a result of the pandemic. Manghani expects India’s newly installed PV capacity for 2020 to reach a mere 4.9GW, a 42% YoY decrease and also the lowest yearly newly added capacity since 2016. On the other hand, although Vietnam experienced a significant spike in PV installation in 2019, at about 4.8GW, this increase was primarily policy-driven. Vietnam’s future PV development will depend on a persistent green energy policy.
According to Wood Mackenzie, although newly added global PV installation capacity declined this year owing to the COVID-19 pandemic, some semblance of demand still exists. The consultancy projects yearly newly added global PV installation capacity to reach 145 GW in 2025.