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| Thu, 2nd Jul 2020 14:00:00 |
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Beware of zombies: PV thriving after chaos |
One could think that, once the pandemic subsides, rationality and science will again thrive in the energy debate and open the door for full-scale PV development to fight climate change. Others might think that the time has come to relaunch the economy at the lowest cost and abandon support for emerging energy sources. And of course, reality will merge both. The old world is collapsing in front of us, oil prices went negative, and energy demand bottomed out everywhere. Incumbents look more and more like zombies, but how is PV affected?
New reality
Covid-19 spread to the entire world, stopping international exchanges, plunging the global economy into depression, and freezing or destroying a significant percentage of economic activity. Previously, producing massively in a limited number of countries looked like a must to many – a must that then vanished in a matter of weeks. The question of whether fully globalized production can be politically sustainable after the shortages seen in the medical sector is a no-brainer: Local production will be incentivized, demanded, and implemented. This is no backtracking from globalization – it is just a logical rebalancing.
What has changed over the last three months in the PV sector? Demand has obviously shrunk, with utility-scale plants experiencing delays with often postponed deadlines. Distributed PV installations declined due to a lack of manpower, and demand became unpredictable (with some unexpected local booms). To date there is no global pattern; countries are experiencing the drama of the pandemic with different timelines and intensities. While China has passed the first peak and reopened most cities, Europe is reopening at different speeds and the Americas are still suffering. Such rolling impacts will most likely move installations by a quarter or more. From a manufacturing point of view, production in China was reduced for several weeks, which led to some disruption all over the world for components and modules, but there was little impact on prices at the time of writing. The decline in demand, along with a decrease in production, kept prices at a reasonable level, rather than triggering a massive price plunge.
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