Rooftop solar projects will be hit harder than grid-connected projects during the nation-wide Covid-19 lockdown—according to Care Ratings.
The analysts stated that while the Ministry of New and Renewable Energy (MNRE) has declared utility-scale solar as essential services, rooftop solar is adversely affected as the movement is restricted in the lockdown and people will not allow anyone to enter their houses or factories which are closed.
Further, as most of the rooftop solar companies are small-sized, they may lack the financial strength to absorb any loss or meet additional working capital requirements, they added.
Rooftop solar installation will be hit even after lifting of the lockdown as new rooftop solar is not a necessity for consumers.
“With users dealing with several financial problems, rooftop solar will be the least priority on their list, leading to a delay in the decisions regarding the installation of rooftop solar,” stated Care Ratings.
Impact on the overall solar sector
Care Ratings analysts outlined various factors contributing to the delay in the implementation of new solar projects.
“Under-implementation solar projects have a greater impact of Covid-19 as solar cells and modules are largely imported from China wherein there was lockdown since December 2019. Also, the outbreak of Covid-19 has coincided with the actual solar project execution schedule as maximum execution happens in the last quarter of the fiscal year in India. Subsequently, as the situation improves in China, India has started facing the problem of nation-wide lockdown”—they stated.
Accordingly, the implementation of new solar projects is likely to get delayed, which could cause developers to miss the completion deadlines.
The analysts also expect solar module prices to spike in the short term due to depreciation in the Indian currency, which could be slightly offset by excess supply from China due to lower demand.