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IHS Markit forecasts a drop in the demand for storage systems

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March 24, 2020 – The anticipated slump in demand will have a greater impact on the storage industry than the temporary closure of production plants. But the supply of battery cells is not expected to suffer any major restrictions.

The coronavirus pandemic is affecting economic systems worldwide. The eurozone should expect to see a recession in 2020, according to Julian Jansen, a leading analyst at the information service IHS Markit. This could lead to major disruptions across the entire energy sector. Jansen says that battery customers in the automobile and PV domestic storage industries will face both falling demand and production stoppages in increasing numbers of countries due to the global pandemic. China, which is home to more than 70 percent of global production capacity for battery cells, is gradually recovering from the measures introduced to curb the spread of the disease. Production is starting up again in many places.

It is not yet possible to fully predict the effects that the COVID-19 pandemic will have on the market for stationary domestic photovoltaic storage systems, says IHS Markit, but the strong first quarter is expected to be followed by a significant drop in demand, especially for behind-the-meter storage systems. There are not currently any major bottlenecks in the supply of storage systems. The grid storage market is probably the sector least affected by the unfolding crisis. Most contractually agreed and planned projects are still set to go ahead, although some will probably face delays of up to three months. But if the fallout from the global pandemic cannot be brought under control in short order, large-scale storage systems could be more severely affected, too.

An economic downturn would also slow demand for electric cars, according to the analysts. This could ultimately push down the price of battery cells for stationary storage systems if manufacturers were to find themselves forced to reduce inventory.

 

Source: pv magazine (in German)