In February 2020, Wood Mackenzie released two reports predicting high growth in solar markets in the 2020s, but the global energy consultancy company is reevaluating these positive prediction sin light of COVID-19.
One of the February reports suggested that solar would become cheaper and more efficient. The other called the 2020’s the “decade of emerging solar PV markets” and stated that the talks at the UNFCCC’s 26th Conference of Parties held in the U.K., set to be held in November 2020, “will invariably lead to more action from financial institutions and investors to redirect capital towards zero-carbon energy.”
Most recently, however, Wood Mackenzie released its newest report on solar specifically on U.S. utility-scale solar projects. The report stated, “The coronavirus pandemic is likely to have a material impact on utility-scale solar installations in the U.S. this year, and perhaps even into 2021.”
In the report, “Coronavirus: U.S. Solar PV Supply Chain and Utility-Scale Market Risk,” Wood Mackenzie noted in a best-case scenario, the market could see up to four weeks of supply delays affecting a few hundred megawatts of modules and inverters. This, combined with construction disruptions, could translate into as much as 2-gigawatt (GW) DC of project development delays this year.
“The worst-case scenario, which sees every step of the supply chain development come to a complete halt for several weeks, could see upwards of 5 GW DC of U.S. utility-scale market pushed back to the second half of this year and perhaps into 2021,” said Ravi Manghani, one of the report’s co-authors.
The report identified four sources of solar module supply risk to U.S. utility-scale solar projects, all of which pose a threat to the pipeline in varying degrees. These are potential production shutdown in Southeast Asia, domestic U.S. production shutdown, international shipping and logistics delays and module bill of material shortage.
In addition to these solar module supply risks, the report identified four potential project development risks: shipping delays resulting from the potential closing of U.S. ports, supply delays of projects, travel delays that limit or delay project milestones, and site shutdowns due to shelter in place orders or on-site COVID-19 infections.
“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,” added the report.