Solar Panel Supply Amongst Covid-19

Updated: Sep 4, 2020

September 3, 2020- 8:22PM

We are now several months into the new normal, at least for now, in which our normal way of doing things has changed fairly dramatically. Covid-19 is closing down some businesses and increasing demand in others.

Local Solar Company Struggles

Some companies are using this crisis as a way to re-invent they way they do business. In some areas of the country this is working out well for companies in cutting expenses. Others are struggling just to get by and with the decrease of the federal tax credit next year to 22%. Most of these companies that are still doing well appear to not be passing those savings on to the customers.... yet.

Among the challenges in keeping everyone safe and the tax credit reduction, is a large spike in homeowners spending money on their own homes. This is causing all sorts of shortages on electrical and construction labor. Not to mention a short supply on common materials such as outdoor rated screws, wire, and similar.

These shortages are going towards non-solar projects and causing in many cases a backlog of work, which is likely to lead to unhappy customers if it continues, however the market seems to be showing a significant slow down in our future, as homeowners and businesses go into a holding pattern.

Solar Panel Equipment

Solar panel manufacturers are seemingly now keeping up with the current demand, but even before Covid-19 there was a shortage of module supply in the USA due to the Tariffs against China.

Module prices began dipping in China, Europe and Australia in March, and the decline showed up in the U.S. market in April, WoodMac’s data shows.

Though Wood Mackenzie is still assessing how precipitous the U.S. decline will be, analysts expect it to be an extended one. “We expect prices to fall consistently,” said Xiaojing Sun, a senior solar analyst at WoodMac. “This is the last thing [manufacturers] want.”

When Chinese factories restarted production after the country's outbreak came under control, the world quickly shifted into module oversupply. And with demand waning, it’s unclear where all that product will go.

“Demand is being disrupted to a large extent globally, so the excess capacity on the manufacturing side is unlikely to be absorbed anytime soon,” said Sun.

Time Will Tell

With so much up in the air over our new normal and whom the "winners" and the "losers" will be, it appears supply will be good and prices will continue to decrease in Q4 of 2020 and likely into Q1 2021. #EYSolarSupply

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