Coronavirus (COVID-19) impact on EU solar sector can be contained with regulators' backing, industry says

Coronavirus (COVID-19) impact on EU solar sector can be contained with regulators' backing, industry says

MLex: The EU solar-power sector is facing many hurdles amid the coronavirus (COVID-19) crisis as delays in supply chains and project development are aggravated by falling electricity prices, which may hamper future investments, representatives of the industry said on 9 April 2020. The EU’s regulators may contribute to containing the virus' impact while boosting the clean-energy transition by persuading national authorities and policymakers to simplify permits procedures and put in place fiscal incentives to boost the sector, they said.

‘This year may be a bad year and we may also experience loss of employment in the sector’, said José Donoso, the general director of Spanish solar sector association UNEF, in a webinar* that took place on 9 April 2020.

Donoso said that in Spain (one of the countries worst affected by the pandemic) project developments are being severely delayed, both in the case of small-scale solar panels installations and utility-scale plants.  

He added that the major drops in electricity prices, caused by falling demand due to the lockdowns that authorities have imposed to contain the virus, are also likely to prevent future investments in solar farms, as financial institutions might start applying more restrictive conditions on investors.

Donoso said that temporary fiscal support measures for small businesses and households, faster licensing processes and auctions for project developers would be key for the industry to recover.

The EU’s role

‘We need customised discussions with governments, but the role of the European Commission is key here’, said Aristotelis Chantavas, Head of Europe region at Enel Green Power. ‘When it wants to adapt measures, it can do it’.

The commission should reiterate its support of the Green Deal, the EU’s ambitious climate goals, in an even more ‘aggressive’ way than before, as well as guide governments to solve persisting problems on permit procedures, grid interconnection and integration of renewables that hamper investments, Chantavas said.

He added that the sector is set to experience a drop in demand unless backed up by ‘robust’ EU policies. 

‘This crisis has shown Europe that it's important to rely on its own sources to produce electricity’, he said.

At the beginning of the pandemic, the solar sector was mostly hampered by delays in the supply chain, because deliveries of solar modules from China were being temporarily delayed due to the confinement measures, said Michael Schmela, on behalf of the EU’s industry association Solar Power Europe.

Now, as the crisis advances in the EU, we see solar tenders being ‘shelved’ as well as delays in the construction of projects. European players fear that, as the sector moves away from subsidies, access to finance for new investments will become more difficult, Schmela said.

‘With the commission working on a recovery program, we would need, for example, a pan-European solar rooftop program’, said Schmela.

In a recent statement, EU leaders have said that the ‘green’ transition should figure as a core element of the EU’s plans to recover from the ongoing economic crisis caused by the Covid-19 pandemic.

Such a plan is under preparation by EU policymakers, together with the European Investment Bank and the European Central Bank.

The impact of Covid-19 on the European solar sector’, Solar Power Europe, 9 April 2020.

This article by Giulia Bedini was first published by MLex, a LexisNexis® company, on 9 April 2020 and is published with permission.

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