Covid-19: The going gets tough for solar manufacturers

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Solar season had already started in the month of March. The demand for solar consumption is the highest during April-June quarter as summer picks up. This is the time when factory runs with full efficiency.

India was estimated to install nearly 8 GW of solar panels in 2020, in which 90% consumption happens in utility-scale solar parks and balance 10% in rooftop sectors.

However, the situation changed as Covid-19 spread unfolded in India. The government announced nation-wide lockdown for 21 days to stem the spread of pandemic Covid-19. The move, proactively taken to safeguard citizens, will have negative impact on the solar manufacturing sector as the factories shut down temporarily.

The labour for solar panel manufacturing process comes from Hindi Speaking belt such as Bihar, Uttar Pradesh, Jharkhand and other states. Some of them have moved to their native village or will be moving soon because it is a scary time for them.

Rupee has depreciated against US dollar up to 5% in the last few weeks, increasing the cost of manufacturing. Cashflows will be in red, since there is no earning and field demand generation is estimated to be low for the next couple of months.

We expect upcoming FY 2020-21 will be hard time for all of us primarily due to four reasons: low demand/slowing economy; depreciating Rupee; unavailability of solar cells, components, labours; and negative cashflows.

The views and opinions expressed in this article are the author’s own, and do not necessarily reflect those held by pv magazine.