​Coronavirus crushing global forecasts for wind and solar power

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 andRystadEnergy 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 powershut-offs.

Global solar and wind

RystadEnergy 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,Rystadsaid in a report Friday. The Oslo, Norway-based research company forecasts wind and solar growth will be cut by an additional 10 per cent in 2021.

Residential U.S. solar

Morgan Stanley projects American residential-solar volumes may plummet 48per centin the second quarter. And the pain will linger. Analysts at the investment bank estimate year-over-year declines of 28per centand 17 per cent 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.

Batteries

Wood Mackenzie has scaled back its forecast for behind-the-meter batteries in the U.S. by 31per cent. 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.

© 2020 Bloomberg L.P.

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