The Impact of COVID-19 on the Solar Energy Industry

Here’s the thing about predictions and estimations: even when mathematicians and researchers spend billions of dollars and years on their solar panel installation affordability and capacity studies, unprecedented occurrences like the COVID-19 crisis get left out of the equation – it’s not something for which at least most of the population was prepared. The last time that the US had a phenomenal year in the solar industry was in 2016, recording a remarkable year and reaching 8 GW of solar capacity.

Earlier this year in January, the Energy Information Administration (EIA) speculated that for 2020, the solar capacity would almost double and reach 13.5 GW of solar capacity just in the USA. This would be backed up by the lowered solar panel costs and improvements in the research and efficiency of solar panels. However, it seems that due to the current global economic crisis instigated by the novel human coronavirus known by its COVID-19 name, the massive growth that had been taking place over the past many years may be leveling off. The good part is that the growth will not remain low or close to flat forever.

Delayed Projects & Tax Extensions

Most people across the globe have been taking the necessary precautionary measures in ensuring the safety, health, and well-being of themselves and their immediate families, including wearing masks, distancing themselves socially by quarantining themselves and their family members and staying indoors. Unfortunately, these and other measures have caused an economic decline unlike any other ever seen before. While in an era dependent on the internet, people have been able to work from home, including the team at EBR Energy however a large chunk of operations continue to rely on manual labor, especially in construction and installation-based sectors like the renewable energy and specifically the solar energy industry of Pakistan.

Although taking precautions is necessary for human survival, this pandemic has brought about a decline in productivity and production itself like no other. Until the ease-off of the lockdown in Pakistan, clients continue to wait, purely depending on phone or Zoom discussions with the solar solutions installation companies like EBR Energy to assure them that their needs will eventually be met.

According to one industry expert in the USA, Robbie McNamara, the National Renewable Business Development Manager of City Electric Supply, the delay in operations is causing “a ripple effect all the way down to the subcontractors.” He went on to say that while this industry is “ seeing a lot of delays right now, there’s still contracted work to be completed… As soon as it’s reasonably possible, the industry will pick back up right where it left off and keep moving forward.” There is a level of urgency involved in this and other construction-based industries due to companies having to be mindful of tax credits. Without asking for an extension for the Investment Tax Credit (ITC), a federal tax credit, McNamara believes that “we’ll probably see a big push to get these projects completed.” The urgency is further prodded by the fact that these credits have not received any funding yet in the $2 Trillion aid package, but there is a possibility of that changing once renewable energy advocates press for an extension coerced by the year coming to a close.

Positivity During COVID-19

The good news remains that advocacy and demand for renewable energy will continue to grow, even if this one year and the pandemic-induced economic crisis pulls the figures down significantly. In a country like Pakistan that is sunny throughout the year, people remain curious enough to educate themselves on solar energy, create and keep in place strong renewable energy goals, and locate companies like EBR Energy to provide them with solar panel installation services at affordable costs.

Sourcing Components & Materials

The main sourcing and manufacturing plants for renewable components and the raw materials required for construction and installation of solar solutions systems are located in China for countries like the US and Australia. In 2012 due to tariffs, these countries switched procurement to South Korea and Vietnam, but the process remained slow. Once China reopens for limited production, prices are likely to rise before they decline again by the end of the year. One solution that EPCs in the solar industry are using is delaying lead orders or entire projects in case of their unavailability on-site once the material is delivered. While this further challenges the economy, it also provides the solar industry with the opportunity to diversify the supply chain of EPCs and promote competitive pricing and independence.

At the moment, it is the hope that homeowners will continue to contact solar providers and remotely focus on investment, potentially proving to fundamentally create a windfall flow of cash into the industry as the world recovers from this pandemic. Choosing and actually investing in renewable energy solutions, not just for your home, but for your business as well regardless of its size, is a decision that will eventually enable everyone around the world to help it regain its strength from the climate crisis that befalls us, even during the lockdown.

With the cost of solar panels continuing to lower in Pakistan, it is easier and simpler than ever to choose renewable energy to power your property. The solar experts at EBR Energy continue to take calls for any and all solar solutions installation queries as well as future investments.