Due to COVID-19, Wood Mackenzie expects 2020 solar PV deployment estimates in 2020 at 106.4 GW, bringing it down from previous expectation of 129.5 GW. For 2021 also it estimates lower new PV installations of 123.6 GW as compared to its prior guidance of 127.2 GW.
- Wood Mackenzie has revised its solar PV outlook for 2020 down to 106.4 GW bringing it down 18% from its previous expectation
- It expects projects for 2020 to be shifted to 2021 which gives next year a better standing compared to 2020
- Supply chain issues are now more or less sorted as China is slowly opening its economy, but localized logistic issues may cause troubles
- It remains to be seen if government stimulus packages will include something for solar
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Wood Mackenzie Power & Renewables has brought down its expected solar power deployment estimates in 2020 to 106.4 GW, a drop of 18% or 23 GW from its previous expectation of 129.5 GW, due to the coronavirus pandemic disrupting the markets globally. That’s not all. The US research and analytics firm has also reduced its guidance for 2021 by 3% to 123.6 GW, as compared to prior forecast of 127.2 GW.
While analysts expect strong economic recovery next year, they point out that projects being planned for 2021 are in the development and financing stage currently, but with markets practically shut, these projects will bear the brunt. However, for the same reason, projects planned for 2020 will be forced to shift into 2021, that’s why deployments for next year look better.
Wood Mackenzie expects this downgrade for 2020 numbers due to delays in auctions, permitting activity and power purchase agreement (PPA) negotiations. “Weak power prices and collapsing [forex] rates are severely damaging the economics of new investments across a wide range of countries. Projects that were slated for 2021 will be tougher to bring to market on time, if they make it at all,” said Tom Heggarty, Wood Mackenzie’s Principal Analyst for Solar, according to Greentech Media (GTM).
Even in the recovery period, Wood Mackenzie wonders if government stimulus packages will include anything for solar and residential and commercial segments which will be badly hit as buying power of end consumers diminishes.
However, the analysts offer some glimmer of hope citing how well positioned the global solar market is to face the situation mainly going by how China has recovered its economy pretty soon. Supply chain issues are taken care of except for some localized logistics issues. Wood Mackenzie underlines that the world will still move towards decarbonization and as restrictions are lifted, the solar industry will continue to be on a steady course.
IHS Markit has already lowered 2020 forecast to 105 GW, from 142 GW previously, while BloombergNEF expects this year to see 108 GW to 142 GW coming online as compared to its earlier guidance of 121 GW to 154 GW, all due to COVID-19 impact on the industry.