The ongoing coronavirus pandemic, better known as Covid-19, continues to have an extensive effect on Singapore’s economy and many industries all around the world.
It has plagued us *pun intended* with a whirlwind of issues, where supply chains have been disrupted, projects are on hold and many are facing retrenchment. Like many other industries, the solar industry is not spared from this crisis with a multitude of short and long term repercussions.
However, compared to the heart-wrenching health impact of COVID-19, the aftermath of the pandemic on the solar industry is considerably small.
Let’s zoom into the various impacts on the solar industry now!
A popular notion has been going around that Covid-19 has been the “best medicine for the planet”. Temporarily devoid from human activities, nature was recovering from all the man-made problems. All around the world, people were sharing on their social media visible evidence of pollution hotspots like Venice and Beijing with cleaner air and water, and animals returning to their natural habitat. Even the pandas were starting to reproduce naturally!
Additionally, due to a decrease in air pollution during the lockdown period, there was an increase in solar power generated from solar panels. As air pollution directly affects the amount of sunlight that reaches the ground, the lack of pollution will drive better sun absorption by the solar panels.
For example, Delhi, the most polluted capital in the world with a PM2.5 concentration of 161, has since dropped to a concentration level of 82 due to the lockdown, falling under the category of ‘satisfactory’. The improvements in air quality also increased the efficiency of solar panels, with 8% more power from solar installations.
Negative Impacts on the Solar Industry
Before we were struck by the Covid-19 pandemic, renewable consumption was predicted to increase in 2020 by approximately 3%. The European Union has also implemented extra policy support with this year kickstarting the 2030 renewable energy goals.
However, with the Covid-19 virus hitting us so suddenly, this has resulted in expected delays in the deployment of renewables. Additionally, as of April 2020, 4.2 billion people are facing global lockdown measures and strict safety measures. With non-essential services like the solar industry being forced to cease operations, the lockdowns have also caused supply chain disruptions and delays in projects. Being forced to cut manpower and follow social distancing safety measures, this inevitably results in a slower completion rate, increasing the risk of delays and missing deadlines, directly impacting renewable energy services.
Additionally, with border closures and restricted business and travel activities, the energy demand in the transport industry has decreased significantly. Investments may also be suspended due to the high risk of losses during this time, implicating many companies worldwide. Many companies such as BloombergNEF, IHS Markit and Wood Mackenzie are scaling down their 2020 solar forecasts due to the Covid-19 outbreak.
Positive Impacts on the Solar Industry
Despite the difficulties of solar companies, consumer interest and solar demand has increased since the Covid-19 outbreak. Compared to pre-Covid times, 63% of individuals who were looking into solar are more interested in it now than ever before.
With work-from-home arrangements expected to continue for an extended period of time, electricity bills will inevitably rise with the increased energy consumption. In Singapore, daily household electricity consumption during the Circuit Breaker period increased by 22% in May 2020 compared to February 2020. Additionally, with the sweltering heat during this time of year, electricity bills started to be a concern to certain households, specifically those with lower income. Using an extra 6 hours of electricity a day on weekdays can result in an increase of monthly electricity bill by 20% each month.
Due to Singapore’s geographical limitations, considering solar or other alternative sources might not be the most viable option for many households living in public housing. However, globally, a significant number of people are looking at solar as a mechanism to foster the possibility of having increased energy consumption with lower electricity bills.
Solar Forecast – The Future of Post-Covid Solar
Well, here’s some good news for you! The future of solar is looking positive with 34% of surveyed consumers stating that the outbreak has accelerated their solar decisions and timeline. Solar, among all other power sectors, is expected to recover quicker than the rest, based on an analysis by the International Energy Agency (IEA).
Assuming that businesses will be raising prices of their goods and services post-Covid, solar stands to be at an advantage with a higher price stability in their energy prices. As the solar market has low volatility, investors are more likely to be drawn by it due to the value of potential returns. Additionally, as renewable energy has been the preferred choice of investors in terms of power generation, it will further boost interest and opportunities within the solar industry. Hence, investments will be a commonsight for solar as businesses capitalise on the situation and increasing market potential.
Given that solar has a multitude of cost benefits, it will certainly be a strong contender for building owners looking to save costs. With solar being a reliable energy source, it will generate sufficient energy for your entire household at no extra costs. This means that building owners or homeowners who are concerned about the possibility of exceeding their energy budget can worry less about their electricity bills with solar. Additionally, with the available financial incentives that come with installing solar, you will be surprised to know that it might not be as unaffordable as you think!
Ultimately, optimism has to be accompanied by governmental support. With a drop in investments and delay in the global progress of the solar target, it is crucial that the government alter policies to further incentivise building owners, homeowners and C&I industries to utilise clean energy alternatives. This will help boost the efficiency of economic recovery of the solar industry from the Covid-19 crisis and the future.
On this note, we hope for the well-being and safety of everyone out there as we navigate through this difficult time together. Mask up, stay healthy and take care! 🙂