The COVID-19 pandemic has had detrimental effects on Singapore’s economy and many industries all around the world. The virus has plagued us (pun intended) with a whirlwind of issues. Supply chains have been disrupted, projects have been put on hold and retrenchment is rampant. The solar industry has not spared from this crisis and is prepared to face the pandemic’s short and long term repercussions. Let’s zoom in on the impact that COVID-19 has had on the solar industry.
The Environment Impact of COVID-19
Some have proposed that COVID-19 has been the “best medicine for the planet”. Massive reductions in human activities have allowed nature to recover from mankind’s actions. All around the world, people had shared visible evidence of reduced pollution. Air and water have become cleaner in many areas and animals have been spotted. What’s more, there has also been an increase in solar power generated from solar panels due to reduced air pollution. In Delhi, the concentration of PM2.5 in the air has dropped from 161 to 82 due to the lockdown.
Negative Impacts on the Solar Industry
Before the COVID-19 pandemic, renewable consumption was predicted to increase by approximately 3% in 2020. The European Union had also kickstarted its 2030 renewable energy goals.
Unfortunately, the pandemic has resulted in expected delays in the deployment of renewables. This has been in part due to billions of people being lockdown globally. Non-essential services like the solar industry have been forced to cease operations. Lockdowns have also caused supply chain disruptions and project delays. Manpower cuts and social distancing safety measures have inevitably resulted in slower renewable energy project completion rates.
Additionally, with border closures and restricted business and travel activities, the energy demand in the transport industry has decreased significantly. The high risk of losses during the pandemic has also resulted in less investment into renewable energy. Companies such as BloombergNEF and IHS Markit have scaled down their 2020 solar forecasts due to the COVID-19.
Positive Impacts on the Solar Industry
Interestingly, the demand for solar has increased since the COVID-19 outbreak. Of the people interested in solar before the pandemic, 63% are more invested now than they were before.
With work-from-home arrangements expected to continue for foreseeable future, electricity bills will inevitably rise with the increased energy consumption. In Singapore, daily household electricity consumption during the Circuit Breaker period increased by 22%. Using an extra 6 hours of electricity a day on weekdays can result in an increase of monthly electricity bill by 20% each month.
This increased energy consumption has motivtaed people to seek out alternative energy sources, boosting interest in solar. Gloablly, many people have begun looking at solar as a viable option to adapt to their increased household energy consumption.
Solar Forecast: The Post-COVID Future
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. The International Energy Agency (IEA) has estimate that the solar industry is expected to recover quickly after the pandemic.
Other players in the energy industry is expected to raise the price of their goods and services after COVID-19. 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 common sight 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! 🙂
This article was first published on 19 November 2020 and last updated on 6 May 2021 to include additional details.
