Coronavirus Crushing Global Forecasts for Wind and Solar Power
(Bloomberg) -- It’s not just oil taking a hit from the coronavirus pandemic. Forecasts for clean energy are being pummeled, too.
Reports Friday from Morgan Stanley, Wood Mackenzie and Rystad Energy project sharp cutbacks for wind, solar and battery growth in the U.S. and beyond this year as cities impose lockdowns and economies stagnate.
It’s a reversal for sectors that were expected to have banner years. Declining battery costs have made energy storage more attractive to American businesses, while solar was poised to benefit from mounting demand from homeowners who live in California and other places prone to wildfires, dangerous storms and power shut-offs.
Global solar and wind
Rystad Energy expects global growth of wind and solar energy will be wiped out this year as the U.S. dollar rises and other currencies fall amid the pandemic, driving up project costs.
Projects in Australia, Brazil, Mexico and South Africa will be hardest hit as their currencies depreciate against the dollar, Rystad said in a report Friday. The Oslo, Norway-based research company forecasts wind and solar growth will be cut by an additional 10% in 2021.
Residential U.S. Solar
Morgan Stanley projects American residential-solar volumes may plummet 48% in the second quarter. And the pain will linger. Analysts at the investment bank estimate year-over-year declines of 28% and 17% in the third quarter and fourth quarter, respectively.
It’s not just lockdowns slowing sales of rooftop panels. Morgan Stanley said the industry is being hurt by a slump in housing starts and by consumers indicating they may postpone or cancel home renovations.
Wood Mackenzie has scaled back its forecast for behind-the-meter batteries in the U.S. by 31%. It previously expected 632 megawatts would be installed this year; now it forecasts 436 megawatts. That’s still up from the 272 megawatts installed last year.
Among the reasons the research company cites for the reduced forecast are supply issues, travel bans and lockdowns that present hurdles for projects that need workers on site. personnel. If delays drag on long enough, they could make some projects ineligible for tax credits and destroy their economics.
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