A 5-gigawatt hit to utility-scale solar in the United States could be on the horizon due to the coronavirus pandemic.
COVID-19's impact on the utility-scale solar industry could play out a few different ways, according to a new Wood Mackenzie research insight.
In the best-case scenario, a few weeks of supply delays, combined with construction disruptions, will translate into as much as 2 gigawatts of project development delays in 2020.
In the worst case, virtually every step of the U.S. utility-scale solar supply chain and project development will come to a halt for several weeks. As a result, the industry could see upward of 5 gigawatts' worth of projects pushed to late 2020 or even 2021.
The solar industry is advocating for itself in Congress and with the Treasury Department to protect developers whose ability to claim the full 30 percent Investment Tax Credit available for 2019 has been imperiled by pandemic-related project disruption.
Risks to utility solar projects include shipping delays from the potential closing of U.S. ports, travel delays limiting or delaying project milestones, project site shutdowns due to strict state-level shelter-in-place orders (even though the Department of Homeland Security has categorized solar construction as essential business), and onsite COVID-19 infections among workers.
Meanwhile, the solar module supply to the U.S. market faces several sources of risk due to the coronavirus, including production shutdowns, particularly in Southeast Asia, and shipping and logistics delays.
Solar manufacturers that have geographically diverse supply chains and downstream players with development pipelines comprising mostly projects that are early-stage or nearing completion are the best positioned to ride the tide, assuming COVID-19 disruptions subside by the end of the third quarter of this year.
On the other hand, projects with single points of failure face the imminent danger of missing deadlines and being compelled to rely on force majeure claims.
Ravi Manghani is Wood Mackenzie's head of solar research. The March 27 insight on utility-scale solar and the coronavirus pandemic is available here.