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Coronavirus May Mean Halt to Global Solar Gains—For Now

Coronavirus May Mean Halt to Global Solar Gains—For Now

Revised forecasts indicate that demand for solar panels will be down this year for the first time since the 1980s.

In the middle of a public health emergency, it’s difficult to think about much of anything besides keeping everyone safe.

But we also need to look ahead at the potential economic effects of this crisis on the transition to clean energy. With that in mind, we are getting a better idea of what coronavirus means for the growth of solar power in the near future.

Projects are likely to slow this year because of disruptions being experienced by the companies that do the work and pay for it.

But there remains a wide range of potential outcomes, depending on the answers to the questions we’re all asking about how long this crisis will last.

BloombergNEF has revised its global forecasts for 2020, saying that demand for photovoltaic solar panels will be in the range of 108 to 143 gigawatts, down from the range of 121 to 152 gigawatts that was in the forecast less than a month ago. This is an 8 percent decrease based on the midpoint of both ranges.

If the low end of this forecast turns out to be accurate, it would be the first down year for solar since at least the 1980s.

Solar Forecast Shows Virus Effects

“The pandemic is really a black swan,” said Jenny Chase, BloombergNEF’s lead solar analyst. “Really as late as February we didn’t realize it was quite going to go global pandemic.”

She told me that the best an analyst can do is give an idea of the broad direction of the market, and then update that direction as things change. It helps that she’s been doing this for 15 years and has seen downturns before.

“People think it’s the end of the world, but people still need clean energy, they still need electricity,” she said. “Energy is still cheap. It still works. I think people will go back to work and build again.”

Looking long-term, she thinks the pandemic will affect renewable energy in 2020 and have reverberations into some of 2021 before we get back to something resembling normal.

In the meantime, the waters will be choppy.

Ohio, Way Behind in Clean Energy, Plans a Big Solar Project 

Last week, Ohio state and local leaders gathered on a farm field to celebrate what, at 200 megawatts, will be the largest solar array in the state.

It was an important step for a southern Ohio region hurt by the closing of coal-fired power plants along the nearby Ohio River. It also came less than a year after the state had passed a measure loathed by most clean energy advocates: a bill that provided subsidies to nuclear and coal-fired power plants, while getting rid of renewable energy and energy efficiency mandates for utilities.

One of the people who spoke at the ceremonial groundbreaking last Thursday was Larry Householder, the Republican Ohio House speaker and a leading architect of that nuclear and coal subsidy legislation.

“This is something really big for the state of Ohio,” Householder said.

In his talk, he addressed his role in creating the legislation head-on, saying the clean energy mandates weren’t working and were too expensive—arguments that are familiar from last year’s debate and were vigorously opposed by the many people who fought against the bill.

“Any time that you do significant change, it’s always controversial,” he said.

The Hillcrest Solar project will cover 1,350 acres and be up and running by early next year, after at least three years of obtaining permits and securing financing. The developer is Innergex Renewable Energy of Quebec, which has solar, wind and hydroelectric projects, mainly in Canada and the U.S.

The overall project cost is $279 million, according to an Innergex spokeswoman.

Ohio's Largest Solar Array

The solar array would pay an estimated $60 million in taxes to the county, township and school district during its projected 35-year lifespan. It also would pay $69 million in wages during the construction, with the developer agreeing to make a special effort to hire Ohioans and military veterans.

“We’re honored to promote clean energy,” said Barry Woodruff, a Brown County commissioner, welcoming a tentful of guests.

Even with this new solar array and several others being planned, Ohio is projected to be near the bottom of the nation in five-year solar growth, according to Wood Mackenzie and the Solar Energy Industries Association.

Solar has grown slowly in Ohio, with 264 megawatts installed. The state ranks 28th in the country; the largest solar array currently operating is 20 megawatts.

Ohio is also near the bottom in five-year growth estimates, ranking 42nd with a projected growth of 1,854 megawatts over the next five years, according to the Wood Mackenzie and SEIA data. That means Ohio’s solar growth—including the Hillcrest project—is anemic compared to just about everywhere else.

Last year’s legislation includes $150 million per year to be split by Ohio’s two nuclear power plants operated by Energy Harbor, the company that was until recently called FirstEnergy Solutions. It also calls for an unspecified dollar figure to go to two coal-fired power plants operated by Ohio Valley Electric Corp., a consortium of several utilities, with the subsidy determined by how much money the plants need to reach a certain profit level.

The bill also has money for solar energy projects, which would split $20 million per year, subject to the approval of a state board.

The law says that utilities are no longer required to meet annual benchmarks for buying renewable energy or for helping customers reduce their energy use. The loss of energy conservation programs will have an immediate sting, since those programs translate into immediate savings for customers and had a net benefit of $5.1 billion for ratepayers from 2009 to 2017, according to one estimate.

Renewable energy advocates have been playing defense almost since the clean energy requirements were passed in 2008. As other states strengthened their clean energy standards, Ohio was going in the opposite direction.

Taken as a whole, last year’s bill is a nightmare for advocates who would rather be debating a timetable for Ohio to get to 100 percent carbon-free energy, the kind of proposals that have now passed in many other states.

“We’re in a transition,” Householder said from the dais. “We’re moving into a new era. I think Ohio can be the leader in this. I really truly believe that.”

If he’s serious, then he and his colleagues need to work much harder on a renewable energy plan to at the very least, catch up with other states that are far ahead.

Coronavirus in New York. Credit: Eduardo Munoz/VIEWpress via Getty Images
The coronavirus pandemic is projected to slow the clean energy transition. Credit: Eduardo Munoz/VIEWpress via Getty Images


By:  Dan Gearino

Mar 19, 2020



From Climate Wire:

‘We’re seeing cancellations.’ Virus hits solar industry

The pandemic caused by the new coronavirus is casting shadows over the fast-growing solar power industry.

It’s one of several business sectors beginning to lobby Congress and the Trump administration for help in meeting obligations and easing potential economic losses.

Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association (SEIA), explained in an interview that “there have been supply chain disruptions from a variety of countries as this pandemic has become global and they have been impacting the ability to finish projects on time.”

SEIA’s problem is that its members must import many of the materials that go into solar arrays. Most of them come from Asian countries, led by Malaysia, Vietnam, South Korea, Thailand and Singapore.

Under the terms of the federal investment tax credit, if a company started a solar project by the end of 2019, it can receive a 30% tax credit, assuming the foreign materials are delivered within 105 days.

Under a “safe harbor” provision, however, if supplies take longer to arrive, the tax credit shrinks to 20%, and for rooftop solar customers, it expires in 2022. For members building larger, utility-scale solar projects, the tax credit will continue at 10% in 2022.

There are other problems if the materials arrive.

“A lot of homeowners aren’t keen on having others in their houses or on the roof. We’re seeing cancellations of residential projects because of concerns about the virus,” Hopper said.

For larger utility-scale solar farms that require crowds of workers to assemble them, there are state rules that they must keep a certain number of feet away from each other.

“They’re trying to figure out how to implement social distancing while they’re building solar projects,” Hopper said.

To Ken Pedotto, the CEO of a Chicago-based company called Solar Simplified, these are among an array of problems that have suddenly made his business more complicated. His company caters to the estimated 85% of people who can’t put solar on their rooftops. Some of them own homes that are too shaded or positioned at the wrong angle to capture enough sunlight.

Solar Simplified is one of a half-dozen companies that benefit from newly passed state laws that allow companies to make deals with local utilities to help cover the cost of building community-sized solar arrays. Customers get benefits in the form of discounted electricity rates that reflect the cheaper price of solar energy.

Pedotto is worried about the labor problem. “We just don’t know how long this new normal in the U.S. of having people work from home and not allowing people to congregate will last,” he said, noting that he has two projects in New York that are facing supply problems.

He thinks Congress should incentivize companies that make solar panels and related materials in the United States. “It’s somewhat ironic that we’ve talked about energy independence for many years, and the result was improved U.S. domestic oil production.”

“The fact that we have a different policy when it comes to renewable fuels doesn’t make much sense to me,” Pedotto said.


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