The influence of COVID-19 on grid parity of China’s photovoltaic industry

With the more efficient involvement of both technology and policy factors in China’s whole industry-chain, the year 2020 is a key period for photovoltaic (PV) industry to achieve grid parity. In this context, COVID-19 may trigger a certain time-delay in new installed PV projects, thereby bringing an uncertain influence on the whole PV industry. To forecast the influence degree and influence cycle of COVID-19 on PV industry, this paper firstly clarifies the key features of epidemic situation as well as the basic rule of such pandemics’ transmission along industry-chain. Then this paper constructs a system dynamics model targeting at cost accounting of PV power generation under the influence of COVID-19 and thus forecasts the variation rules, superposition effects and influence cycle of levelized cost of energy (LCOE) of PV power generation and the operations cost of each sub-system. Empirical results show that PV industry has a lag response to the COVID-19 for 1 quarter and periodic response for 4 quarters, which is mainly embodied in the rise of short-term production cost. At the same time, the influence of COVID-19 on the upstream firms of PV industry is stronger than that on downstream firms. With the gradual recovery of whole industry-chain, LCOE of PV power generation will rapidly return to the previous expected level of grid parity by the end of 2020.