The COVID-19 pandemic has created an atmosphere of uncertainty for all industries and segments – and of course, solar is not untouched by these major disruption. Strict quarantine measures in effect in several countries in Europe result in project development and construction timelines being pushed back. Problems associated with this are numerous too.
It is time for governments to support the industry that's expected by SolarPower Europe (SPE) and LUT University to be the 'largest' power generation source in two 100% renewable scenarios for Europe by 2050 or already 2040. This was the dominant feeling among panelists at one of the webinars hosted by The 1st World CleanTech Week eConvention.
Speaking at the webinar organized by the CleanTech Business Club, SPE Policy Director Aurelie Beauvais accepted the fact that solar industry is struck hard by the pandemic, but pointed out that things are expected to get better soon as SPE sees things coming back to normal, although it's too early to say if this will be 2021 or 2022. This would depend on general economic recovery and stimulus packages offered by governments. In any case, the mid-to long term solar growth story is still full intact.
The main problem that all panelists visualize is related to easy availability of finance to fund solar power development. In its solar proposals for the European Union (EU) stimulus package, SPE is advocating supporting access to finance for the industry and also boost job creation by encouraging the development of small-scale PV.
SPE Executive Advisor Michael Schmela pointed out the fact that wholesale electricity prices in Europe are falling down due to decreased economic activities, which in turn has reduced the profitability of solar, something some banks consider an increase in risk, asking for re-negotation of loans for subsidy-free solar projects. The attractively of solar PPAs has decreased as well.
Representing the Spanish solar PV sector, UNEF's Jose Donoso said his industry is asking the government to speedily execute auctions for the industry while also ensuring easier permitting processes to ensure stability in the market. In particular, the self-consumption segment is the one Donoso expects to experience a bad year due to COVID-19 impact, as social distancing makes rooftop installations basically impossible these days.
Encourage local solar manufacturing
The one thing that COVID-19 has made it amply clear is that globalization is fine, but it is extremely important for every region to have its own large scale solar manufacturing to cut down its dependence on China or other global markets. Joachim Goldbeck, CEO of German EPC Goldbeck Solar and President of German solar association BSW, stressed that a robust local supply chain within Europe would ensure it achieves cost parity with China made products, a view that European Solar Manufacturing Council Chairman and Former Director of Fraunhofer ISE Eicke Weber endorsed, saying Europe needs 10 GW to 15 GW of solar PV production capacity to be able to compete with Chinese products on cost. SPE's Schmela pointed out that the sheer volume of solar expected to be installed in Europe requires a decent amount to be produced also in Europe simply for energy security reasons. SPE has just released a report, modeling a 100% renewable energy scenario for Europe, which anticipates solar to be the largest power source on the Continent by 2050, supplying over 60%, compared to wind with around 30%.
Xavier Daval, CEO of kiloWattsol and Co-Chair of Global Solar Council, believes that once Europe is on top of the solar upstream segment, it can be anywhere in the downstream segment as solar is so versatile and usable on every device.
Nonetheless, for all this to happen, support of the European policymakers is essential as it would bring certainty among investors. Eurelectric's Bruce Douglas emphasized, the EU recovery package needs to be aligned with climate ambition.
The 1st World CleanTech Week eConvention takes place from April 20-24.