The world is moving towards renewable resources, and solar energy has evolved to be the most important source of green energy. Australia is one of the most advanced nations when it comes to preparing cheap solar energy. According to a report published by the Australia Energy Market Operator (AEMO), 34% of the alternate source of energy came from solar energy.
Things got picked up during the recession when the buying power of people got affected. As a result, people were seen investing in solar panels. However, another interesting observation was that there emerged a shortage of solar panels. Therefore you might think of repairing a solar system on the Sunshine Coast.
A pertinent question might evolve here:
Is there any connection between the recession and solar panel shortage? We will discuss them all in the following article. So let’s get started with our discussion.
Recession Hits The Economy
The discussion on coronavirus and its effects on the economy is important for the purpose of an open discussion. The economy was badly rattled during COVID-19. During that time, many small-scale industries were constrained to shut down.
During the pandemic, the manufacturing sector came to a standstill. This really impacted the purchasing power of the people. The new start-ups really failed to get the funds to set up their business.
Take, for instance, the USA figures. According to estimation, the job sector viewed the loss of employment ranging from 50,000 to 5 million. Australia was no better.
Therefore it could be understood that the economic recession badly rattled the Australian domestic economy.
Relation Between The Recession And The Solar Panel Shortages
There is a connection between the economic recession and the solar panel shortages. Let’s try to understand it here.
1. Supply Chain Issues And Increases In The Cost
According to an estimation, around 700 GW of solar panels has been invested worldwide. These big figures. This means different countries were investing in different solar projects. However, during the recession, the supply chain got completely disrupted.
You might know that China is the destination where most solar panels are manufactured and exported to Australia and different parts of the world. Due to this scenario, the solar components turned out to be expensive. Special mention needs to be made of polysilicon. Not much polysilicon was mined during this period. It put a break on solar panel manufacturing. The lack of manufacturing created an artificial demand in the market.
2. People Were Struggling With High Electricity Bills
As mentioned below, people already struggle with high electricity bills. In addition, the economic recession impacted the spending of the people. Therefore, with a lesser propensity, people were literally struggling to keep pace with the development. This is why they thought it better to invest in solar energy.
Solar energy is expensive in the initial stages. But later on, they have the capacity to become completely free of cost. Gradually it led to increasing demand for solar panels. With restricted imports during the recession, both the companies and the buyers felt the solar panel shortage.
3. Low Solar Loan Interest Rates Make Finances Easy
In times of recession, the central banks generally lower the interest rates. This paved the way for an ecosystem for investment in solar technology. Generally, solar technology is expensive at the outset. With lower interest rates, people are ordered to invest in solar technology.
They were ready to apply for EMI payments. Therefore suddenly, there erupted a demand for solar panels in Australia and worldwide. The buyers considered an investment in solar technology better than paying for expensive home loans. This is how things got transformed during the recession.
Again this scenario created an artificial demand for solar panels. First, there was a disruption in the supply channels, and second, there was an increased demand for solar panels. These two factors resulted in the eruption of solar panel shortage during the recession.
Closing The Discussion
Solar energy is touted as the future of power supply. Therefore people found it necessary to invest in solar technology. Now during the economic recession, consumer power got affected drastically. But, even then, the demand for solar panels went on increasing. Therefore it can be said that people have fewer options but to invest in solar panels.