The second wave of the COVID-19 pandemic has dealt a damaging blow to all businesses across the world. The solar sector too is feeling the ripples of this unprecedented crisis of modern times in terms of reduced demand, supply and workforce availability challenges.
As we may be aware of, India is running the world’s largest clean energy programme to achieve 175 gigawatts of renewable capacity, including 100GW of solar power by 2022. Let us delve into some of the critical challenges faced by this dynamic and promising sector while governments the world over are fighting to flatten the curve of this life-threatening virus.
Delayed projects and price escalations
According to industry experts, approximately 2.3 GW of solar plants in India are running behind schedule with respect to the deadline of commissioning between June to August as the expected modules have been only supplied since March. Starting July, projects worth over $2bn are at risk of missing scheduled commissioning.
The current situation is expected to further impact the capacity and future bids. Furthermore, it will become difficult for developers to control price surge, as the prices of supplies from other sourcing nations such as Taiwan or Malaysia are going to escalate by 15-20 per cent. Thus, several companies in this sector are looking for additional financial support to deal with rising working capital costs and interest payments.
It is speculated that since social distancing will continue to be the new normal, public transport (especially trains and buses) will take time to resume their normal operations. This is expected to lead to a labour crunch since many of the migrant workers have already left for their hometowns.
The import dependency
As much as 80 per cent of the demand for solar cells and modules are met by imports from Chinese companies. The pandemic has drastically affected the manufacturing capacities of China, as all major ship container companies have also stopped functioning out of Chinese ports. How quickly this will be normalized is anybody’s guess, considering how our country is currently crippled by the second wave of the virus.
In the medium to long run, the Indian government will do well to articulate policies that help domestic manufacturing, but without compromising on the quality and pricing of solar panels. Moreover, the pandemic will have a lasting impact on the B2B and B2C consumer-buying behaviour and choices. Sustainable, cheaper and clean solar energy is likely to be amongst the top priorities once the markets open up again. So eventually, the rooftop solar market will stand to gain, backed by strong consumer demand. This will also create a huge market for off-grid, hybrid and storage based solar systems and products.
Additionally, the ministries and financial institutions have been regularly pushing reforms and packages to keep the financial activities rolling. The Indian business community, which creates employment and contributes to the country’s GDP and nation-building, is eagerly waiting to start operations post lockdown, which might happen in phases. This ambivalent time calls for special efforts from the government and businesses to put the economy back on track at the earliest; minimizing the impact on this sunshine industry by this unwarranted disruption due to Covid-19.
Nimbus Solar Solutions, as a reputed renewable energy company, has always made significant contributions to the Solar Revolution in our country. The company is always abreast of the needs of all businesses, whether big or small, and will continue to supply tailor-made solar products for all industries. The company also boasts of a team of experienced engineers and technicians to install, maintain as well as provide necessary education about all the futuristic solar projects.
After overcoming these difficult times, the company’s thrust area will be to accelerate the process of driving India towards becoming a global leader in solar energy. Its strong financial relationships and deep knowledge of tax implications will facilitate every business to receive maximum return from their investment in solar power.
For more information, visit www.nimbussolar.in