How Covid-19 Is Impacting USA Solar Installations Companies

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Altered Energy – Alternative Energy news

Before the coronavirus pandemic brought the world to a near standstill, the photovoltaic energy sector was growing quickly, accounting for almost 40% of new generating capacity across all electricity-generating markets in 2019.  In their Solar Market Insight Report 2019 Year In Review,  the Solar Energy Industries Association noted record-setting installation of residential solar capacity during the year, up 15% from 2018, and had expectations that “By 2025, one in every three residential solar systems…will be paired with energy storage.”  In fact, everything about the report seems quite rosy,  until you notice the bolded notation stating “Please note this edition of Solar Market Insight does not account for impacts of the coronavirus outbreak.” 

But the virus has impacted the solar market in significant ways.  Jobs have been lost.  Installations are down.  The supply chain is kinked.  While it’s important to acknowledge these current realities, the more important questions for 2020 and beyond are: how long will markets be affected, and by how much? 

As it turns out, perhaps not for very long, and not by much at all. In fact, a recent article published by the Yale School of the Environment states that “long term, renewables could emerge stronger than ever” due to improving technology, dropping prices, and the stability the PV market offers over other energy sources like oil and gas.  These benefits will only be made greater by any kind of economic-recovery package that integrates clean energy.  

While changes from COVID-19 like social distancing and short-term economic instability have had an immediate impact on the number of installations completed, this trend shouldn’t be considered a harbinger of what is to come. According to a nationwide survey from EnergySage and Qaultrics, Americans are now more likely–not less–to consider solar installations than ever before.  And while some consumers are delaying installations, a near-equal number are accelerating those decisions.  

Below we discuss what is happening now, and what some experts think may happen in the rebounding American economy once a vaccine is found for COVID-19.  

Consumer Behavior is Changing, Not Stopping

As consumers attempt to social distance, more are shopping for everything possible using online options.  This includes solar.   Since the beginning of the COVID-19 pandemic, two out of three potential solar customers have shifted their focus to online research and shopping as they make plans for future solar systems. 

To meet this need, many solar companies have pivoted to offer “touchless” consultations using virtual video conferencing for consultations, as well as screen-sharing for information distribution to customers.  Digital technologies are being leveraged for touch-free paperwork.  Installers are maintaining social distance when on-site; some companies have even begun using drone technology to conduct site surveys rather than send techs out to a customer’s location. 

Some of these technologies may continue well past the pandemic. This should lead to overall cost savings and increased productivity as compared to pre-pandemic days when sales staff were required to travel to the customers’ homes for on-site sales meetings.   Or it may be reserved as an option for customers who prefer to interact with sales representatives virtually. 

While two out of three customers are searching online, roughly the same amount of consumers (63%) in the research stage are now more interested in purchasing solar than they were before the pandemic happened. There are several reasons for this surge in interest.  Lockdowns and forced isolation have given consumers more time to consider upgrades to their homes.  Meanwhile, more time at home has increased sensitivity to electrical consumption just as many families are learning how to economize due to changing economic conditions.  This has led to a perfect storm where energy independence through solar is even more inviting to the everyday consumer. 

Additionally, concerns over grid instability have risen during the COVID-19 pandemic, so much that many traditional power companies have felt the need to allay fears through positive press stories.  Consumers are looking to residential solar panel systems with battery backups as a way to keep their families and their homes safe during this time of uncertainty. 

A large percentage of consumers surveyed by EnergySage (34%) have now moved up their plans for installations.  But concerns for continued social distancing as well as changes in economics should be taken into account in this emerging market. These two concerns have played a part in roughly 24% of consumers delaying their installations for a few months or more, 7% for over a year.   Installers have noted about 13% of customers who had previously signed contracts have cancelled installations outright.   

But there are many positives.  More consumers are accelerating their desire for independence by integrating batteries into their systems as part of the installation process. And while delays are never the best option, delayed installs ensure business continuity. 

Solar companies around the country have exhibited resilience and flexibility by changing to new market demands and requirements to meet the needs of this moment.  This will result in stronger companies, better educated consumers, and more efficiently-built systems. 

Effects of COVID-19 on Solar Installation Providers

While the COVID-19 pandemic has dealt a significant blow to the solar industry–nearly half of all companies have recorded layoffs or plan to reduce staff soon, more than two-thirds have had customers postpone or delay jobs–it is important to note 91% of installers surveyed were open and actively installing as of May 2020.   Federal guidance from the US Department of Homeland Security has designated solar workers as essential.  While some state-level guidance supersedes this, most states allow installations to continue. 

Even with decreased staff, solar installers have seen improved sales through online channels as consumers look for more resilient energy options.  Additionally, more installers are noting an increased interest in storage options as consumers look for ways to create a system that will provide energy independence and resilience for times when the traditional energy grid cannot provide service.  This desire can be partially attributed to reliability issues the traditional power grid is facing in the wake of the COVID-19 pandemic. 

For the moment, however, solar installers may feel caught in a Catch-22 situation.  Delays in necessary materials in the PV supply chain from China have caused shortages in components required for installs.  China is the primary supplier of solar panels and cells as well as being a major source for the world’s racking system components and inverters.  Nearly 80% of the glass used in the manufacturing of solar panels is made in China.  

Global supply chains that were already strained by the US-China trade war weakened or snapped after the pandemic, leaving many companies here with an uncertain downstream supply of needed goods.  According to a recent Garner survey of 260 supply chain leaders from various industries, nearly one-third were planning on pulling their sourcing from China to reshore or move closer to demand  as soon as plausible.  However, such moves may be difficult for the PV market, where reshored options are limited.  However, suppliers in other Asian markets may fall under consideration, including those in Korea, as companies look to diversify their downstream partners.   

Why More People are Looking to Solar Energy 

In a year full of risks, the power grid has faced its own reliability issues.  According to a June 2020 insight report by the Congressional Research Service,  potential disruptions and workforce issues caused by the virus have created elevated risks to the US electric grid.  This includes longer restoration times following natural disasters, increased cybersecurity risks due to employees performing work from remote locations (teleworking),  and possible supply chain disruptions caused by unscheduled outages due to missed maintenance windows.  

We’ve already seen some of this come to pass.  In early August, Tropical Storm Isaias left more than 2.5 million customers in the dark up and down the East Coast.  It took nine days to restore power to all customers.  When a derecho–a powerful line of severe thunderstorms with winds exceeding 100 miles per hour–hit Iowa a few days later, it took over a week for power to be restored to customers there.  

The risk of cyber attacks to the electrical grid have increased as utility employees log in from home using VPNs (virtual private networks) that may have “unpatched” vulnerabilities.   These weaknesses may give cybercriminals a route into highly critical programs.  Such weaknesses have been used before in European countries like Ukraine, which experienced a blackout caused by a  Russian cyber-attack in 2015.  

Additionally Pew research has noted an increase of blackouts and brownouts in the USA in the decade before the pandemic, so much so the US now “experiences more electric outages than any other developed nation.”  Reasons for these issues include aging infrastructure, a lack of national investment, and an increase in turbulent weather patterns. One suggested solution to these problems is to redistribute power generation from a central point to smaller distributed points, specifically through onsite solar panels paired with battery storage, as an efficient and stable backup for times when connections through the electrical grid via a central energy source become unavailable. 

Factors that May Help the Solar Market Rebound After the Pandemic

Some governments have begun discussing the incorporation of climate action into COVID-19 recovery plans, meaning this year may well become a pivotal moment in the history of renewable energy.  

As the demand for energy has plummeted around the globe due to pandemic lockdowns, renewable resources have increased their share of the global generation market.  Part of the reason for this is due to renewable’s lower overall cost, which puts them first in line to be dispatched to the grid.  This, in turn, has destabilized the price of gas and oil as fossil fuel companies have had to deal with a sudden glut of product and no readily available storage. 

While this may initially seem disconnected to home solar installations, the two are connected by the hopes and plans of clean power advocates.  There is a significant amount of stimulus money attached to possible economic recovery packages being put forward by these advocates, shifting away from fossil fuels in favor of wind and solar energy.

 In fact, legislation to provide the industry with significant assistance is already pending,  including the America’s Clean Future Fund Act.  This bill would provide $50 billion for clean energy projects in its first year and is designed to stimulate the economy, spur job creation, and guide the US to become a zero-carbon economy.   The bill provides several provisions that would be advantageous to solar installers around the country. 

While it’s true that many consumers are dealing with economic instability, others are reaping the benefits of historically low interest rates.  Those homeowners who are able to refinance will find it easier to fold in the cost of a solar upgrade to their existing home, in essence doubling the power of their new loan by lowering their interest rate and their electric bills in one fell swoop.  Those who are able to make use of the Solar Investment Tax Credit before it sunsets will reap an even greater benefit. 

Additionally, an article published by MIT recently noted that the COVID-19 shutdowns and stay-at-home orders had an unexpected but extraordinary side effect:  reduced air pollution, improved air quality, and a measurable increase in the output of solar photovoltaic panels.  The study found that as pollution levels dropped, output from solar panels increased by 8.3% in March and by 5.9% in April, a significant increase.  

This research allows a glimpse of a future world where countries have achieved net-zero targets.  It also demonstrates how each solar panel installation is not only beneficial to the individual, but is also helpful to every other person who has or will have solar panels installed in the coming decades.  

Until the COVID-19 pandemic runs its course, we will not know its true effect on the globe.   There are still too many uncertainties to know for certain how much longer this pandemic will run.  But in the future of solar installations, it seems like this will be remembered as a short stumble at the beginning of a long, successful marathon.  

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Altered Energy – Alternative Energy news