China emerges as leader in solar PV installations as COVID-19 makes dent in renewables market

According to GlobalData, China and European countries have slowly resumed operations and relaxed lockdown restrictions, and the effects of the global economic downturn will dent the renewables sector.

The latest study from GlobalData,’ Thematic Research: Renewable Energy,’ highlights that decreased demand raises project financing uncertainty, which in turn affects construction timelines and stunts growth.

“Power purchase agreements (PPAs) have and will continue to be integral in supporting the deployment of renewable energy without government subsidies, and for corporations to attain their sustainability goals. Project developers are reliant on cash flows from PPAs, which, in certain cases, could represent their entire revenue stream and act as collateral for loans to support future projects. Reduced industrial activity due to lockdowns has resulted in decreased commercial and industrial power consumption, which affects existing PPAs.”

Sneha Susan Elias, senior analyst of power at GlobalData.

In the midst of the COVID-19 crisis, China has emerged as a pioneer in solar photovoltaic (PV) installations and solar PV panel production. The country has the highest installed capacity of more than 205 GW of solar power, leading to more than 35 percent of the world’s installations.

The annual installation in China is estimated to be about 30 GW in 2020, but the outbreak is likely to affect solar installations during the year. Even though China managed to get the virus under control within two months, the flow of its wind supply chain has already been interrupted.

Moreover, major manufacturing centers for the global wind power industry, such as India and the European regions of North America, are still in crisis.

“The industry has seen visible impact in terms of lost production – particularly in the European countries that faced more strict lockdown regulations such as Spain and Italy. However, all of Europe’s wind turbine and component factories have now been re-opened after easing of restrictions throughout Europe. A total 96% of the European wind factories are open at this stage of the COVID-19 pandemic. In the event of a second wave, GlobalData expects that there will again be suspension of production at few sites, leading to delays in projects.”

Sneha Susan Elias, senior analyst of power at GlobalData.