The disruption caused by the Covid-19 pandemic on Chinese solar photovoltaic (PV) manufacturing companies has prompted a major jolt in the global solar PV supply chain, says analytics and consulting company GlobalData.
“The resulting shortage of PV components is disrupting the industry at a global level. Many solar PV developers in Asia and other parts of the world have experienced prolonged delays in importing solar PV modules and other related supplies.
“The global solar PV value chain is particularly affected because the manufacturing capacity of the countries is concentrated in a few major markets such as China, the US, Taiwan and Japan,” explains GlobalData senior power analyst Somik Das.
Most of these nations have been impacted by the pandemic.
Additionally, many of the developers around the world are dependent on the Chinese manufacturers to provide the PV modules.
Developers are not only facing component supply disruptions, but also labour shortages, as quarantine measures are being implemented the world over to contain the virus’s transmission.
Das notes that the shortage of equipment and labour is not confined to major markets, but also in other upcoming solar markets such as Australia, France, Spain, Taiwan and Malaysia.
Since the initial implementation of tariffs in 2012, the US has slowly diversified its panel procurement base from being overly reliant on China to Malaysia, South Korea and Vietnam among others.
However, with the pandemic impacting the aforementioned countries, the procurement supply chain of major markets like the US and several European countries, from these countries, is going to be negatively impacted. This, in turn, will cause major delays to the projects in the pipeline.
The global solar industry is facing several challenges, inflicted by the outbreak of the Covid-19 pandemic. These challenges are strong enough to threaten the survival of various businesses and developers within the developed markets across the globe.
“With challenges in procuring equipment and labour, companies with long-term harboured projects are expected to face a great deal of inconvenience, increasing their exposure to risks and liabilities.
“However, the pandemic has taught the industry the negative aspects of being overly dependent on any one nation as a base for supplying components,” Das says.
He adds that, moving forward, major players in the developed economies will surely understand the importance of housing the components manufacturing units within the nation, which in the long run will significantly reduce the overdependence on other markets, and also reduce the negative impact of similar crisis situations, on the country’s solar sector.