Despite the coronavirus outbreak in Brazil, experts in the solar energy segment are optimistic about the forecasts for the sector after the crisis. For them, this moment is important to reinvent themselves and seek opportunities.
“It is our role to work to find solutions and think instead of drowning in bad news. In this case, we have to see where the opportunities are. The search for efficiency will continue, as it brings economic growth and generates competition for all other activities”, stated Bernardo Marangon, director of Exata Energia.
Marangon also states that, after the crisis, companies from other segments should start investing in the electricity sector. “We have oil companies, for example, interested in changing the energy matrix, moving away from oil and switching to renewable energy. So, even though we are going to face a crisis with a lack of resources and governments in debt, private companies will certainly have the capacity to overcome this demand for new investments”, he concluded.
According to Pedro Dante, energy lawyer at Demarest, the photovoltaic energy sector remains strong. “The crisis knocks you down, in the short term it's scary, but anyone who works in the energy sector works in a segment that even with a crisis has opportunities. Brazil is a machine that is ready to take off again. Therefore, I remain extremely optimistic, I am not changing my opinion despite the coronavirus pandemic”, explained the lawyer.
Economic impact
For Pedro Dante, the country should have a full economic recovery from October. Until then, Brazil will feel the impacts of reduced demand. According to Claudio Loureiro, general manager of JA Solar in Brazil, the country should see a significant reduction in demand in the coming months, as residential customers and small businesses are not installing photovoltaic systems. Furthermore, regulatory entities and concessionaires are not analyzing the projects, due to the Covid-19 pandemic.
“For example, many companies have working capital restrictions, an essential factor for the business model, both distribution and installation. In this case, entrepreneurs and managers have to prioritize in some way what can be done to keep the business running.
If we adopt an isolation policy in Brazil like that of the United States or Europe – with an estimated suspension of activities between two to three months – this will be a period of severe cash restriction. So be conservative to sustain the longevity of your business”, stated Loureiro.
Loureiro also said that after this period, the good news will return, as the facilities should resume. “This will happen because the photovoltaic sector has already demonstrated that it is resilient to adverse macroeconomic situations – just that growth has been going on since 2012 and occurred at critical moments in our economy”, he clarified.
Greener Research
With the aim of analyzing the impact of the coronavirus outbreak on the solar energy market in Brazil, Greener carried out a survey with 541 companies in the sector, 75% of which were represented by system integrators.
The mapping showed that around 50% of companies have already been affected by an increase in photovoltaic system costs, due to the fall in the Brazilian currency in recent weeks. Furthermore, it showed that the company's cash flow is the main factor of concern in this period of turbulence.
“We are new to the solar energy market and had not yet experienced major crises. This is the first time that I have seen the sector stop growing for some reason. Many projects have been postponed and frozen due to the coronavirus situation. So, at this moment we have to reduce costs due to medium-term uncertainties”, explained Elvis Almeida, commercial director at MySol.
Recommendations
To deal with the difficult market conditions created by the coronavirus outbreak, Greener has provided a list of recommendations for companies: Below:
- Ensure the safety and health of the team and follow the recommendations of the authorities;
- Identify the main risks and look for alternatives to mitigate them;
- Map your company's fixed and variable costs and try to optimize expenses;
- Negotiate payment and conditions;
- Check whether suppliers are experiencing pandemic-related issues of any kind;
- Strengthen your brand and encourage innovation in the way you communicate;
- Strengthen your team in the post-crisis period and invest in training;
- Work remotely when possible and ensure employees strictly follow health and hygiene advice;
- Quarantined employees who may be infected;
“The scenario is critical and we have to prepare. We have to be careful with business and work to preserve jobs”, said Márcio Takata, director of Greener.
