Coronavirus could trigger solar panel cost spike

Feb 4, 2020 05:52 PM ET
  • The coronavirus outbreak in China might raise solar module rates in the near term as makers have actually already started experiencing wafer and solar glass lacks. Production rates are also being impacted by an extended new year vacation introduced by the authorities as a procedure to deal with the infection, and the requirement employees from contaminated areas quarantine themselves for two weeks.
Coronavirus could trigger solar panel cost spike
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Financial investment banking company Roth Capital Partners has actually predicted solar costs consisting of the cost of PV modules might increase in the near term as the coronavirus break out in China has actually resulted in lacks of solar wafers and module glass.

Roth stated the Chinese brand-new year holiday has actually been extended until Sunday in 8 provinces to assist deal with the infection, consisting of the key worldwide solar production locations of Jiangsu, Zhejiang, Guangdong and Anhui.

“& ldquo; The companies that have actually returned to us about the coronavirus effect have said they have been resolving the holiday,” & rdquo; said the investor in a short statement. “& ldquo; We & rsquo; ve been informed ‘that the & lsquo; not to return to work & rsquo; order, i.e. work interruption, may not apply to business that never dismissed workers. Our guess is that while the majority of the facilities have actually been up and running, they likely have not been performing at 100% staffing.”

& rdquo; Low production rates China’& rsquo; s National Health Commission said transportation has been seriously interrupted in numerous regions, even more impacting manufacturing. With Beijing having extended the brand-new year break till yesterday, city governments have actually added a more week to the shutdown and are most likely to stretch the lay-off for at least another 7 days in an effort to consist of spread of the infection.

With people in affected areas bought to quarantine themselves for 2 week, it is thought factory utilization rates throughout all industries in the impacted locations might have slumped.

The big Chinese solar makers which have actually reacted to pv magazine’& rsquo; s concerns about the effect of coronavirus –-- on condition of privacy –-- stated their factories are operating at extremely low rates and they do not prepare for a return to typical production in the instant future.

Third-quarter healing

The National Energy Administration and the State Grid Corporation of China have actually warned of the danger coronavirus poses to the energy market and the Chinese Photovoltaic Market Association (CPIA) has actually prompted the federal government to postpone connection deadlines for large scale solar projects on March 31 and June 30. As it stands, late completion of tasks will impact the quantity of subsidies received.

The trade body anticipates PV market output to suffer until mid year as a result of the outbreak. If, as anticipated, the virus is tamed by the end of June, the recovery might start in the third quarter, according to the CPIA.

One senior authorities at a PV manufacturer informed pv magazine the outbreak suggests he is prohibited from going to the U.S. for company purposes. “& ldquo; Even business trips to overseas branches are minimal and this will cause lower operating performance,” & rdquo; he said. There has actually been speculation the authorities could introduce new stimulus policies to assist the solar market recover in the 2nd half however no main announcements have actually been made.


The affect of the infection break out will be less pronounced outside the world’& rsquo; s greatest solar marketplace, according to Bloomberg New Energy Financing analyst Jenny Chase.

“& ldquo; If you are a designer or EPC [engineering, procurement and building and construction companies] in Europe with a deadline showing up –-- or a European maker with no raw product inputs to fulfill orders –-- yes it is a big deal,” & rdquo; Chase informed pv magazine. “& ldquo; I & rsquo; m unsure it moves the needle much on the gigawatt scale, that’& rsquo; s all. We checked out this briefly and concluded that although this will be troublesome for some companies, the volumes involved are quite little and the vast bulk of projects can wait a couple of months for modules. It must be possible to do most of the prep EPC work, I think.”

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