The coronavirus pandemic is likely to have a material impact on utility-scale solar installations in the U.S. this year, and perhaps even into 2021. In its Coronavirus: US Solar PV Supply Chain and Utility-Scale Market Risk report, Wood Mackenzie says that, in a best-case scenario, the market could see up to four weeks of supply delays affecting a few hundred MWs of modules and inverters. This, combined with construction disruptions, could translate into as much as 2 GWdc of project development delays in 2020.
Report co-author Ravi Manghani said: “The worst-case scenario, which sees every step of the supply chain and project development come to a complete halt for several weeks, could see upwards of 5 GWdc of US utility-scale market pushed back to the second half of this year and perhaps into 2021.”
The solar module supply to the U.S. market faces four sources of risk, all of which pose a threat to the pipeline to varying degrees:
• Potential production shutdown in South-east Asia;
• Domestic U.S. production shutdown;
• International shipping and logistics delays;
• Module bill of materials (BOM) shortage.
U.S. utility solar projects face four primary sources of project development risks:
• Shipping delays from the potential closing of US ports;
• Supply delays of products;
• Travel delays limiting or delaying project milestones;
• Site shutdowns due to “shelter in place” orders or onsite COVID-19 infections.
Wood Mackenzie has not included any financial risks in its assessment. The COVID-19 pandemic is already having impacts on the financial markets that will almost inevitably result in changes to the US solar project finance landscape.
Solar manufacturers that have geographically diverse supply chains, and downstream players that have development pipelines in very early stage (or nearing completion), are the best positioned to ride the tide, assuming COVID-19 disruptions subside by the end of the third quarter this year.
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