Chinese officials have nothing left to do but wait and try to gauge the anticipated negative effects of the novel coronavirus on the solar industry due to the long shutdowns and low production levels of many plants across the country.
According to investment bank Roth Capital Partners, the potential effects of the coronavirus could cause a spike in the price of traditional photovoltaic (PV) panels due to underproduction. As a worldwide solar leader for several years, China appears to be slowing in PV production for reasons beyond just the ongoing viral outbreak, which is proving negative to the workforce.
Throughout China and especially in specific manufacturing cities like Jiangsu and Guangdong, the Chinese New Year has been extended by the government as an effort to combat the coronavirus outbreak, ultimately creating problems for solar companies trying to meet March deadlines set by the State Grid Corporation of China. Internal reports indicate that the factories are operating at low production rates due to a severe number of employees staying home and not working. The Chinese Photovoltaic Industry Association (CPIA) urged the government to postpone the deadlines, as the underproduction will certainly prove detrimental to the progress of the PV industry and eventually lead to lower subsidies if the deadlines are not met.
The growing concern is that China had previously announced a plan to only implement around 40 GW of solar energy in 2020 and make it one of the slowest solar policies in recent years for the Asian solar powerhouse. With the coronavirus continually wreaking havoc, the effects could prove further detrimental to already dismal predictions for the Chinese PV industry.
Some of the previous reasons given for the slowdown was a wide range of policy issues including the removal of quotas for grid parity in various provinces as well as shortages of cash and property to expand PV plants.
The issues were mainly based around miscommunications between China’s National Energy Administration and top solar energy companies. Now the coronavirus has begun to weaken the domestic workforce, only adding further predicted slowdown and a predicted increase in the cost of PV panels which could prove overall detrimental to China’s reputation as a global leader in solar energy expansion.
