A 5-gigawatt hit to utility-scale solar in the United States could be on the horizon due to the coronavirus pandemic.
The coronavirus’ impact on the utility-scale solar industry could play out a few different ways, according to a new Wood Mackenzie research insight.
Best-case scenario, a few weeks of supply delays, combined with construction disruptions, will translate into as much as 2 gigawatts of project development delays in 2020.
Worst-case, virtually every step of U.S. utility-scale solar supply chain and project development will to come to a halt for several weeks. As a result, the industry could see upwards of 5 gigawatts of projects pushed to late 2020 or even 2021.
The solar industry is advocating for itself in Congress and with the Treasury to protect developers whose ability to claim the full 30 percent ITC available for 2019 has been cast into doubt by pandemic-related project disruption.
Risks to utility solar projects include shipping delays from the potential closing of U.S. ports, travel delays limiting or delaying project milestones, and project site shutdowns due to severe state-level “shelter in place” orders, even though the Department of Homeland Security has listed solar construction as essential business, or onsite COVID-19 infections.
Meanwhile, the solar module supply to the U.S. market faces several sources of risk due to coronavirus, including production shutdowns, particularly in Southeast Asia, and shipping and logistics delays.
Solar manufacturers that have geographically diverse supply chains, and downstream players that have development pipelines in very early stage (or nearing completion), are the best positioned to ride the tide, assuming COVID-19 disruptions subside by the end of the third quarter this year.
On the other hand, projects with single points of failure face the imminent danger of missing deadlines and having to rely on force majeure claims.
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Ravi Manghani is Wood Mackenzie’s head of solar research. The March 27 insight on utility-scale solar and coronavirus is available here.
Source: Greentech Media
