The effects of the coronavirus in China, the world’s leading supplier of solar systems, are already posing major problems for the solar industry.
The coronavirus is now a global health emergency, but the country most affected is the country where the virus first appeared: China.
To prevent the spread of the virus, the country has quarantined many cities. In addition, some Chinese provinces have ordered factories and businesses to shut down completely, which has completely halted Chinese production (including solar production).
Since China is the largest manufacturer of solar modules on the planet (they alone account for 70% of the world market), the widespread shutdown of the solar industry can harm the world.
What is coronavirus?
Coronaviruses are common viruses that usually cause illnesses such as the common cold or minor diseases of the upper respiratory tract. A new coronavirus strain, COVID-19, first appeared in the city of Wuhan, China’s Hubei Province in late 2019.
Currently, 78,514 cases of coronavirus are reported in China and 2,747 people are dying. This new contagious burden is spread through personal contact. This means that it can spread between people about two meters apart. It is still unclear how contagious COVID-19 is, but it seems to spread easily to communities around the world.
With the virus spreading so easily across China, the country has taken steps to prevent further transmission of the virus by introducing quarantines and work interruptions to limit personal contact.
Coronavirus quarantines and restrictions disrupt Chinese production
First, China has extended the Chinese New Year holidays to prevent the spread of the virus. Because the coronavirus is transmitted from person to person, many cities have been quarantined and travel restrictions have been imposed.
Travel restrictions affect 500 million people, more than the entire population of the United States!
Businesses and manufacturers in some provinces have been instructed to cease operations at least February 9, and many closings are currently underway (early March 2020).
In the provinces of Jiangsu, Zhejiang, Hubei, and Anhui, the cities are quarantined. In total, approximately 50 million people have been directly affected by quarantine requirements.
The combination of mandatory breaks, travel restrictions, and longer vacations is hitting China hard and is likely to significantly disrupt the solar industry’s supply chain.
The solar supply chain affected by the coronavirus epidemic
In the quarantine provinces, there are many important production facilities in the solar industry, including Trina Solar, Hanwha Q Cells, and Enphase.
Chinese solar production hit hard
China is a hub for manufacturing solar panels. Trina Solar, JA Solar, Suntech Power, Yingli Solar, Jinko Solar, and Hanwha Q Cells are just a few of the companies that have manufacturing facilities in China.
The extended Chinese New Year vacation delayed production by three days. Production has been stopped due to mandatory work interruptions.
Travel bans also prevent workers from going to work. Even when the work ban increased, many people were unable to leave their cities to work in factories.
It is estimated that 11 million migrant workers live in Hubei province alone, where the coronavirus originates. There are 11 million people who were unable to go to work even when their factories opened. As a result, the open factories operated at much lower production rates due to labor shortages.
Solar production abroad affected by a shortage of raw materials
The impact of this situation appears to be more serious in China, but overseas manufacturing is also expected to be affected. Many solar power plants outside of China depend on Chinese imports for raw materials such as aluminum frames and photovoltaic glass.