COVID-19’s Impact on Wind, Solar Energy

While it may not be as dire a proposition as that presently faced by the oil industry, the renewable energy industry in the U.S. has been hard-hit by the coronavirus pandemic. The crisis has resulted in construction delays; it's put thousands of laborers out of work and led to doubts on the part of developers regarding solar and wind projects that are either in progress or on the drawing board.

According to Abigail Ross Hopper, president of the Solar Energy Industries Association (SEIA), "There are many smaller companies going out of business as we speak. Up to half our jobs are at risk."

In New York and New Jersey, SunPower has halted installation of more than 400 residential solar systems over concerns for worker safety, and in California, some local agencies that issue permits for new work have shut down. In several states, some solar companies have been forced to furlough installers.

Guarded Optimism

As detailed in a recent article in Boston magazine, industry leaders are confident that the future for renewable remains bright, but the worldwide slowdown is definitely forestalling the transition to cleaner energy and threatening the viability of some companies in the industry. "Even as some states move toward reopening, executives fear diminished incomes and work disrupted by layoffs and social distancing will do lasting damage."

The wind industry has been hit with slowdowns due to delays in getting parts from overseas, getting them to job sites and constructing new turbines. "The industry was on a tremendous roll right up until the last month or two," according to Tom Kiernan, CEO of the American Wind Energy Association. "That reversal is stunning and problematic."

The residential solar sector has been hit especially hard, according to SEIA's Hopper. The door-to-door sales model isn't practical for the time being, and potential customers are guarding their discretionary dollars more closely than before the pandemic. Deals with commercial buyers also have fallen off significantly.

"Pre-pandemic, there were great dreams and aspirations for a record-setting year," said Paul Gaynor, CEO of Longroad Energy, a utility-scale wind and solar developer. "I'm sure we're not going to have that."

Based on observations from consulting firm Wood Mackenzie, new solar installations could be 17% lower worldwide than expected this year, and wind turbine manufacturing could fall up to 20%.

Wrestling a Dying Giant?

According to the U.S. Energy Information Administration (EIA), fossil fuels such as natural gas and coal remain the leading providers of the nation's electricity, with nuclear power remaining a key contributor, but renewable sources (wind, solar, hydroelectric, biomass and geothermal) have jumped in the last decade as production costs have fallen.

Many states are now ordering ordered utilities to make greater use of renewable energy to reduce greenhouse gas emissions. Renewables produced nearly one-fifth of the country's energy last year (EIA).

Despite the recent setbacks, the EIA predicts that renewable energy will grow at a rate of around 11% this year, an indication of the sector's strong position before the economic downturn. In the meantime, coal-fired power is expected to decline 20% and gas generation to grow just 1%.

The setbacks remain challenging for the renewable industry, even in California, where residential solar demand was booming due to rolling blackouts and state laws requiring new homes to produce as much energy as they consume. "I'm sure we'll bounce back, just smaller," Cinnamon Energy Systems CEO Barry Cinnamon said. The company temporarily furloughed all 20 of its employees over the last few weeks.