Continued spread of COVID-19 pandemic has forced one more market intelligence firm to lower its projections for global solar module demand in 2020. PV InfoLink expects 108.8 GW for the year in its medium outlook, down from 129.1 GW it forecasted in March.
- For 2020 global solar module demand, PV InfoLink has lowered its estimates to 108.8 GW compared to its previous estimate of 129.1 GW
- Weakening overseas demand due to stay-at-home orders with the relentless spread of COVID-19 is a major reason for this conservative outlook along with postponement of some auctions globally
- PV InfoLink points out depleting demand for solar will hit the DG segment hard especially in the C&I space, impacting manufacturers targeting these segments
- China is likely to hold up to 39.5 GW demand with top 10 module companies expected to control major market share
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Weak demand for solar outside of China due to a continued spread of COVID-19 pandemic has led PV market intelligence firm PV InfoLink to lower its global module demand estimate for 2020 to 108.75 GW. However, this is its neutral scenario. In the pessimistic scenario which translates into the pandemic persisting, its projections are over 10 GW lower – at 98.17 GW.
These projections are a downer from its previous estimates of 129.1 GW that it shared during a early March 2020 TaiyangNews webinar when PV InfoLink expected the market to do much better as the supply side in China improved. In February, its 2020 forecast stood at 134.3 GW .
The main reasons for this new outlook is the depleting demand for solar modules overseas (outside of China) where some utility scale auctions have been postponed as in Europe and the Middle East. Demand has either ‘frozen or delayed’ in overseas markets with the escalating pandemic and it is anticipated to remain sluggish over the second and third quarters.
The distributed generation (DG) segment is hit hard especially in Europe and the US with quarantine and stay-at-home orders. Hence manufacturers of the distributed generation segment specifically will see their order volumes going down in the commercial and industrial (C&I) space. However, work on some utility projects in various geographies has continued.
There is also uncertainty whether governments will be extending grid-connection deadlines and auction timelines to provide a breather to their respective solar markets.
China, a bright spot
As the pandemic started in China it also was the first market to have curbed its spread and started economic activity. PV InfoLink expects the world’s largest solar market to hold up demand in the second and third quarters, projecting 39.5 GW in 2020, which is lower than IHS Markit’s latest forecast of 45 GW, but more optimistic than GlobalData’s recent estimate of 33.4 GW.
The Top 10 module manufacturers will continue to maintain their stronghold in the market as their order books signed for Q2/2020 haven’t changed much and their order volumes are significantly higher than from tier-2 producers.
“The impacts of COVID-19 have rippled from the supply side and out to the manufacturing sector in March through April. With demand looking uncertain in the second quarter, end users have remained conservative. Although Module manufacturers have lowered their prices, demand is not likely to rebound because projects have been postponed,” added PV InfoLink. “The recent mono PERC prices have come in at $0.198 per W to $0.21 per W in overseas markets. The pessimistic market outlook is being felt through the supply chain.”