Coronavirus expected to impact solar industry supply chain – ROTH Capital

• ROTH Capital Partners has told investors that the recent outbreak of the Coronavirus in China is likely to impact the solar industry supply chain, due to extended work stoppage in eight provinces, many being key solar manufacturing hubs, through February 9th.

ROTH said in an investor note that checks made, indicated many PV manufacturers continued some level of production during the Chinese New Year holiday period.

“We've been told that the "not to return to work" order, i.e. work stoppage, may not be applicable to companies that never dismissed employees. We are still trying to confirm this. Our guess is that while most of the facilties have been up and running, they likely have not been running at 100% staffing,” ROTH said in the investor note.

ROTH noted that within the eight provinces that extended work stoppages, notably include Jiangsu province, was home to a number of ‘Solar Module Super League’ (SMSL) members major manufacturing hubs, including Canadian Solar, LONGi Group, Trina Solar, Q-CELLS and JA Solar. 

Zhejiang province is home to some of JinkoSolar’s manufacturing operations, the largest SMSL, while JA Solar also has manufacturing operations in the province. 

ROTH also highlighted that PV inverter companies such as SolarEdge and Enphase Energy had contract manufacturers in affected provinces of Guangdong and Anhui, respectively. 

With ‘limited’ continued production through Chinese New Year and lack of visibility into issues related to returning workforces, ROTH capital also noted that shortages of solar wafers were emerging and possibly glass for PV modules. 

This would likely lead to near-term solar supply chain component pricing increasing, according to ROTH.