Impact of the coronavirus on the Chinese economy will have an effect on the solar energy sector

The epidemic of the new coronavirus (Covid-19) will impact the industrial sector in Brazil, according to research carried out by Ciesp (Center for Industries of São Paulo). According to a survey carried out by the entity, nine out of ten companies in the industrial sector say they will be economically harmed due to the outbreak of the new coronavirus in China.

In the solar energy sector, expectations are uncertain. Companies and associations are optimistically awaiting the market recovery. “There was a movement, by order of the Chinese government, to reduce the agglomeration of people, which impacted the factories, but this situation has already been overcome. The factories have already resumed and Chinese stocks are already being replenished,” said the CEO of ABSOLAR (Brazilian Association of Photovoltaic Solar Energy), Rodrigo Sauaia.

“In the logistics process, there have been changes to the regulations, making the shipping procedure more rigorous. Despite this increased rigor, our associates say that it is still too early to have a clear idea of ​​the impact on the Brazilian market. The good news is that suppliers have good stock, as the expectation for this year was a buoyant market,” he added.

For Carlos Evangelista, president of ABGD (Brazilian Association of Distributed Generation), companies in the sector should feel the impact on supply starting in April. “We will feel the halt in production in April and May, because some Chinese companies have partially resumed production, but they are working in three shifts with masks and they need to change them every four hours. Even with the resumption, they need to make up for all the delay because it created a backlog (delay) of delivery times worldwide. However, even producing in three shifts, it is still not enough to immediately normalize the sector”, stated Evangelista.

Like the associations, the expectation of companies in the sector is that the situation will normalize and the impact will be mild. “Except for Wuhan, everything is returning to normal. Production is gradually resuming with several additional precautions, such as the use of disposable masks and frequent temperature checks for all personnel. There was a small impact, but in the case of Risen, except for glass, the production of inputs is very verticalized and all other inputs are produced internally by the company itself,” said Fernando Castro, sales director at Risen Energy.

Solis do Brasil’s sales director, Desheng Lei, believes that supply will not be affected. “I don’t think there is a problem for the solar sector, since all Chinese companies have resumed their activities. I believe that only delivery will be affected. I think that in March and April some companies will not have enough stock and this may cause delivery costs to increase, but nothing that will affect the final price in Brazil,” Lei commented.

Distributor Aldo Solar is also optimistic. “All the cargo scheduled since last year is arriving on schedule. Our partners in China and other countries have informed us that the processes are being tightened, but that everything is proceeding normally. Given the growth forecasts for the solar energy segment in 2020, we are planning for a series of large shipments at the end of the year,” said Aldo Teixeira, founder and president of Aldo Solar.

“The impact should be 0,1 to 0,5% of global GDP. The good news is that cases are no longer growing at the same rate as they were in China, for example. The arrival here in Brazil was expected, after all, it is very difficult for a continental country that has connections to the entire world not to be affected. The most important thing is that the infected person is in good health and the health authorities have been very careful in dealing with the case,” highlighted Ricardo Balistiero, coordinator of the Administration course at Maua Institute of Technology.

“So, I believe there will be a stabilization in the economy, since cases are not growing with the same intensity in China, as they were last month. However, a slight impact on the supply of some industrial items is expected. The trend is that throughout the first half of the year the coronavirus will lose strength”, he concluded.