The Covid-19 pandemic will lead to the postponement or cancellation of financial close on some 3 GW of solar and wind project capacity in Australia, according to Norwegian consultancy Rystad Energy, as the falling Australian dollar renders projects uneconomical. As capital expenditure costs have increased in recent months – with rising hardware costs typically priced in US dollars – developers will be challenged to profitably meet power supply contract pricing commitments.
Australia was poised for a record roll-out of large scale PV this year, with up to 2 GW of projects expected to connect to the grid. At present, 530 MW of PV capacity has reached financial close and has either begun construction or will do so this year. However, Rystad predicts the impact of Covid-19 on project economics will delay or cancel financial close on the outstanding projects. The state of New South Wales looks set to take the biggest solar hit. Some 65% of Australian PV – and 67% of wind – projects yet to reach financial close this year are located in NSW. The utility scale PV companies expected to bear the brunt of the damage include Hong Kong firm UPC, French operator Neoen, domestic outfit Wollar Solar and Sino-Canadian business Canadian Solar, according to Rystad.
Californian employment research company BW Research has calculated the U.S. clean energy industry shed 106,000 jobs last month as the nation grappled with Covid-19. The figures show a 16,500 monthly hit to the generation workforce in particular. BW predicts a further 500,000 clean energy jobs could be lost in the absence of policy support for the sector. Not all the job losses however, may have been caused by the public health crisis, with PV industry body the Solar Energy Industry Association having warned in December President Trump’s solar tariffs could lead to the loss of 62,000 solar jobs.
Similarly, with German solar installers predicting commercial and industrial rooftop jobs will tank in the months ahead, the coronavirus pandemic has not been cited as the main culprit. Although sustainability market research company EUPD Research acknowledged Covid-19 when drawing together the results of an industry survey it carried out, the federal government’s seeming unwillingness to reduce a cap on solar incentives emerged as the main grievance among installers.
Germany is still committed to ending public subsidy for solar systems with generation capacities of up to 750 kW once the country reaches 52 GW of subsidized PV capacity, despite having pledged the limit would be removed at a UN climate summit in New York in September. That, rather than Covid-19, is why commercial and industrial orders are expected to dry up in the current financial quarter, the installers said.
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