This Week in Green Tech: How COVID-19 Will Affect the Renewable Energy Industries
Tom Lombardo posted on April 07, 2020 |
Engineering.com takes a look at COVID-19’s impact on the solar and wind industries.

Between factory shutdowns, falling oil prices, shelter-in-place policies, and economic uncertainty, industries related to renewable energy are preparing for some lean times. Engineering.com decided to take a look at COVID-19’s impact on utilities, as well as the solar and wind industries. We found that the news isn’t as dire as it may seem, as most areas expect to see continued growth, albeit at somewhat more modest levels.

Utilities

Economic recessions tend to result in lower energy usage as travel and energy consumption decrease. Case in point, after the financial crisis of 2008, power consumption in the U.S. took a nosedive, bounced back a bit, and then tapered off. It took an entire decade for energy consumption to reach pre-2008 levels. While much of that is rightfully attributed to the recession, part of it was likely due to energy efficiency initiatives that were, at the time, embraced by the U.S. government. Given the more severe nature of this economic crisis, we could see a significant decrease in energy consumption for a much longer period. This will create cash flow problems for utilities, which will be exacerbated by the fact that many low-income customers will likely struggle to pay their utility bills for a while.

The economic crisis will likely have varying effects on the renewable energy industry. (Image courtesy of the U.S. Department of Energy.)
The economic crisis will likely have varying effects on the renewable energy industry. (Image courtesy of the U.S. Department of Energy.)

While many power companies have been voluntarily shifting from fossil fuels to renewable energy, one has to wonder whether they’ll delay this transition due to the plummeting price of natural gas and the current administration’s rollback of many policies that supported renewable energy. It’s likely that projects already underway will be completed, but concerns about the future may delay some utilities’ plans to increase their renewable energy portfolios. On the other hand, in states where the leadership has made a commitment to replace fossil fuels with green alternatives, we can expect solar and wind installations to continue as planned, although slight delays may occur due to supply shortages and shelter-in-place initiatives.

While the U.S. economic stimulus package failed to provide direct support for renewable energy, it did earmark a portion of funds toward improving the nation’s infrastructure. Some of that funding will undoubtedly be invested in smart grid technology (essential to large-scale sustainable energy) and microgrids, which frequently make use of renewable energy sources.

Solar

Temporary shutdowns in China are impacting the solar module supply chain, which will have repercussions through the end of 2020 and perhaps beyond. While some factories are coming back online, many are limiting production. Some PV (photovoltaic) manufacturers in the U.S. are shutting down, decreasing production, or even retooling to make emergency ventilators (e.g., the Tesla solar plant in Buffalo, N.Y.). Globally, many manufacturers are expecting shortfalls in supplies, while others are reassuring customers that deliveries will remain on schedule through the end of 2020. Again, this suggests that projects already underway will continue, but it could have a negative impact on new residential sales and installations.

Modern tools and best practices should keep the residential solar market going. (Image courtesy of the U.S. Department of Energy.)
Modern tools and best practices should keep the residential solar market going. (Image courtesy of the U.S. Department of Energy.)

Economic uncertainty will likely lead many consumers to delay large capital expenditures, causing a temporary downturn in rooftop solar installations. Prior to the pandemic, market analysts expected 2020 to see a 25 percent growth in residential solar installations over the previous year; now they’re projecting anywhere from a 15 percent growth to a 5 percent downturn.

Residential sales and installations will continue, however, which leads to concerns about worker and customer health and safety. The Solar Energy Industries Association and solar installer Sunrun have both released guidelines and best practices for solar sales, site assessment, design, and installation that allow the work to continue while observing social distancing guidelines. Thanks to advances in technology, remote site assessments—including shading analyses—have become the norm these days. On the permit and inspection side, the Interstate Renewable Energy Council will be hosting a webinar called Continuing Safe Permitting and Inspection Practices during COVID-19 to help the authorities work safely and effectively.

Wind Power

Unlike fossil fuel and nuclear power plants, which are in centralized locations with full-time engineers and technicians on staff, wind farms are remote, spread out, and don’t require constant attention. Frequently, they’re serviced by technicians who travel from one wind farm to the next. Some analysts estimate that wind farms, which normally operate at 95 percent capacity, could drop to just 85 percent capacity due to travel issues related to COVID-19. And much like solar, new wind farms could be delayed because of factory shutdowns, travel restrictions, and investor concerns. Nonetheless, experts predict that 73 GW of new wind power will be installed in 2020, down from pre-pandemic projections of 78 GW.

Wind power is projected to see smaller gains, but gains nonetheless. (Image courtesy of the U.S. Department of Energy.)
Wind power is projected to see smaller gains, but gains nonetheless. (Image courtesy of the U.S. Department of Energy.)

Growth Will Continue

In general, we can expect the renewable energy industry to experience a slight setback during the next year or two, but it’s already gained enough momentum to keep moving forward, regardless of short-term slowdowns. Even when top-level U.S. policymakers tried to squelch the movement toward renewables, the energy industry knew better than to backtrack. COVID-19 will have lasting effects on many aspects of society, but the evidence suggests that its long-term negative impact on the growth of renewable energy will be small.


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