The coronavirus (Covid-19) outbreak in China could have a months-long impact on the Australian solar sector, with PV module stockpiles likely to be exhausted soon. After discussing the likely impact with a few key solar panel manufacturers, Solar Juice co-founder and head of supply, Rami Fedda said in a video message on LinkedIn this week that it seems the impact on the supply chain could cause a PV module shortage.
After the Chinese government extended the new year holidays as part of its coronavirus mitigation measures, many returned to work on Monday, but some have not been able to start work immediately because they traveled and needed to be quarantined for at least 14 days. According to Fedda, this means that factories have been running under capacity due to staff shortages. Other parts of the supply chain have also been affected, such as trucking and ports, with many containers waiting at ports.
“We expect things to return back to normal to China around early March,” Fedda said, while warning things will not run smoothly in Australia until early April. “We strongly believe the stock available in Australia will not get us through to mid-March, let alone late March.”
With around 90% of the solar modules on Australian rooftops featuring “Made in China” labels, according to data from SunWiz, Fedda stressed that customers should look at alternative products and non-Chinese brands, like REC, LG and QCells. “We want everybody to start planning by the month, not just by the day, and this will reduce the chance of getting disappointed due to not having panels – because if there’s no panels there’s no solar installations,” he said.
Beyond potential solar project delays, the coronavirus outbreak is expected to cause a PV module price spike that will affect the global industry. Investment banking firm Roth Capital Partners has predicted that solar prices including the cost of PV modules could rise in the near term as a result of shortages of solar wafers and module glass.
The supply issues are also expected to hit the battery storage market with Wood Mackenzie predicting a knock-on effect for large-scale energy storage deployment in Australia, the United States and the United Kingdom. According to the U.S.-owned market intelligence firm, tight battery cell supply could cause delay risks to grid-scale storage deployments in Australia, which was tipped as one of the leading world markets for battery storage deployment in 2020 pre-coronavirus outbreak. Australia and China had been expected to add around 1 GW of grid-scale energy storage capacity between them, WoodMac said, but that figure may now face revision because of the coronavirus.
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