Impact of Coronavirus on the Solar Industry

Impact of Coronavirus on the Solar Industry

Coronavirus, or Covid-19, has brought the world to a standstill. With economies crumbling globally and daily life being severely altered, this global pandemic has posed a serious threat to the very existence of human life on this planet. With most of the businesses shutting down globally, the solar energy sector has also seen the drastic impact of this virus and has made leaders in every industry and arena rethink their future strategy one day at a time. With countries under lockdowns, several sectors including the solar energy industry are facing several critical challenges from all sides.
Most of the Indian solar companies including the best solar companies in Mumbai providing solar power solutions and renewable energy solutions import their solar equipment such as solar cells, solar photovoltaic, solar batteries, solar modules, and other solar raw materials, predominantly from China and the cost for solar modules accounts to almost 60% of the total cost of a solar project. However, due to the recent coronavirus crisis, there have been delays in the overall supply chain of manufacturing solar components and solar panel installation. Currently, Chinese companies dominate the Indian solar components market due to competitive pricing wherein they supply 80% of solar cells and solar modules. The coronavirus outbreak has highlighted the fact that several countries including India are heavily dependent on China for solar component manufacturing and do not have a diversified manufacturing base that can cater to the demand in the light of any kind of crisis.
Given the current statistics of the coronavirus crisis and its global impact on nearly all kinds of businesses, India can position itself as an alternative manufacturing destination for global companies and cater to the needs of the solar market. India has become one of the top renewable energy producers globally and has committed itself to ambitious capacity expansion plans of achieving 175GW by 2022 and 500GW by 2030 due to its climate commitments. However, the solar energy supply chain delays caused by the coronavirus outbreak in China could considerably impact India’s green energy progress severely wherein the solar energy companies could be penalized for missing their project completion deadlines if the impact of the outbreak prolongs. Moreover, the coronavirus outbreak is probably going to cause a hike in the prices of solar equipment unless urgent measures are undertaken. Moreover, a significant increase in the prices of solar power is expected because of the increase in the prices of solar photovoltaic modules, and the existing solar energy projects need a review in terms of their timelines for completion.
According to the country’s largest industry body “Confederation of Indian Industry (CII),” taking a look at the complete schedule of solar power projects in the next two quarters and a re-look at the import strategies for solar module sourcing are of prime importance as of now. They also mentioned that the current health crisis serves as an opportunity for “Make in India” for the solar sector so as to build a strong and competitive domestic solar manufacturing industry and cater to the solar energy companies in India and abroad. Hence, considering that any delays can adversely impact businesses at multiple levels and price hikes can cause huge losses to some of the best solar companies, India can and must act in the direction of becoming a strong alternative for manufacturing solar equipment, which will not only help in meeting the domestic requirements but also international.
India has become one of the top renewable energy producers globally and has committed itself to ambitious capacity expansion plans of achieving 175GW by 2022 and 500GW by 2030 due to its climate commitments. Significant measures will be required to be undertaken to tackle the severe problems that the coronavirus outbreak has caused globally. The government along with key governing bodies and important industry players from the renewable energy sector will have to come together so that Indian solar energy projects are executed without much delay and India’s future solar project targets are met.

 

Sources:

https://energy.economictimes.indiatimes.com/news/renewable/coronavirus-solar-power-prices-expected-to-rise-in-india-industry-demands-projects-review/74218646

https://www.business-standard.com/article/economy-policy/govt-may-to-extend-safeguard-duty-on-chinese-solar-power-equipment-120010601341_1.html

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