China’s March Jump in PV Exports Unlikely To Sustain

China-based manufacturers got some relief in March, as PV equipment exports spiked 160 percent to 7.49 GW over the 2.83GW figure for February 2020. March was when most Chinese manufacturers restarted operations after the lockdown and disruptions caused there, by the Covid-19 outbreak. A resumption to full production is still in doubt, with restrictions rolling across this month to revent a second wave of Covid-19 in the country.

In any case, the March figure is unlikely to be repeated in April, thanks to the spread of the pandemic and its impact in key markets by then. The United States, India and Europe, besides Australia  have all moved to various stages of lockdown, with job losses in the clean tech sector particularly high in the US at over 100,000. The march spike was probably due to the order backlog from the December-January period that was prevented from execution due to  logistical issues within the supply chain and shipment delays at major Chinese container ports through January and February.

Interestingly, the March 2020 figures are close to the export levels in the prior year period, which stood at 7.56GW.

The big worry now would be the invocation of force majeure by some buyers, to delay taking deliveries or even cancel orders altogether. While most Chinese majors have moved to a Letter of credit based system for orders in India, many do offer some credit to buyers where they have had a long association. Even these relationships are likely to be tested, as delays due to lockdown persist in India.

The silver lining might be the possible resumption of work sometime in May, going by the exemption given to renewable energy projects by the government, as well as the progress on project bidding, which has continued afoot despite the lockdown in India. With a construction pipeline of close to 30 GW for solar, chances are that a significant amount of orders will still be placed, though it might be only June, when clarity emerges on the quantum and timelines for the same.