Future of US solar industry clouded by coronavirus

Solar firms are facing disruptions to supplies of components and labour shortages, as well as lower demand.

Solar farm
Solar accounted for 40 percent of the US's new electric generating capacity in 2019 compared with 32 percent for natural gas and 27 percent for wind [File: Alejandro Cegarra/Bloomberg]

The spreading coronavirus is threatening project schedules in the booming United States solar industry following a year in which the sector topped natural gas as the nation’s top new energy source, according to a report published on Tuesday.

Fallout from the pandemic has impacted supply chains and demand in the fast-growing industry, and the president of the top US solar trade group said its annual market report’s projection of 47 percent growth in 2020 will be ratcheted down in the coming weeks and months.

It was still too soon to incorporate the pandemic’s impact into the sector’s outlook with certainty, the Solar Energy Industries Association said.

“It’s really across the board a pretty significant crisis in the solar industry in addition to a significant crisis in the overall economy,” Abigail Ross Hopper, president of the Solar Energy Industries Association, said in an interview.

Solar companies are facing not only disruptions to supplies of components such as panels and inverters, but labour shortages as Americans are asked to limit social contact to reduce the spread of the Covid-19 disease or are forced to stay home due to school closures, Hopper said. In the rooftop solar market, homeowners may be putting large investments on hold for the time being, she added.

The slowdown marks a major about-face for the industry, which has been growing rapidly as states and businesses seek to move away from fossil fuels amid growing concerns about their role in climate change.

The industry has 10 gigawatts (GW) of utility-scale projects currently under construction, the report said. Once online, they would generate enough power for about 1.9 million homes.

Last year, the US solar industry installed 13.3 GW of capacity, a 23 percent increase from the previous year. Utility-scale projects accounted for nearly two-thirds of the market.

Solar accounted for 40 percent of the nation’s new electric generating capacity, compared with 32 percent for natural gas and 27 percent for wind.

The residential solar market also had its biggest year ever for installations at 2.8 GW. The sector benefitted from increased demand in California after planned power outages during wildfire season left hundreds of thousands of utility customers in the dark, the report said.

Source: Reuters