GlobalData analysis have shown that the recent manufacturing disruption in China is going to have an impact on the UK solar sector, with the market expected to stall and even modestly decline by the end of 2020.
Lack of support, restrictions implemented due to the COVID-19 pandemic, and lack of domestic manufacturers make the UK highly dependent on imports to cater to demand.
“Quarantine measures are likely to see development timelines being pushed back by at least a quarter, impacting the deployment of solar projects. Before the COVID-19 outbreak, the solar industry was coping with policy changes, which impeded its growth. However, the pandemic is now expected to slow the sector down even further. The annual installed capacity was projected to reach 290MW in 2020 but has been revised to 220MW.”Somik Das, senior power analyst at GlobalData.
In 2015, the UK government withdrew its support for large scale solar and slashed feed-in tariffs (FITs) for small-scale systems. Later, in 2019 the government replaced it with Smart Export Guarantee, which resulted in a slowdown of the domestic market. Now the fall in solar PV additions due to pandemic would further hurt the sector by slowing it down.
“The withdrawal of support for solar PV was executed to promote its development without the support of subsidies. Following the implementation of the Smart Export Guarantee, the market was not expanding as quickly as before with deployments being carried out mostly at the residential and community levels.”Somik Das, senior power analyst at GlobalData.
Restrictions that have been imposed impacted the movement of workers and supplies to construction and service sites. Disruptions in the supply chain will likely increase equipment prices.