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US Energy Storage Association: Covid-19 Will Cause ‘Deep’ Revenue Downturn This Quarter

(Credit: Pixabay)

The US Energy Storage Association (ESA) today released survey results that show the impact that the novel coronavirus will have on the industry. The study was focused on analyzing the covid-19 effect on energy storage companies’ revenue, employment and projects in the second quarter.

The survey, which was answered by 101 representatives across the storage industry, revealed:

  • While 63% of respondents indicated they expected a decrease in revenues (with 33% expecting 20% or greater reduction), 75% did not expect to reduce employment (inclusive of contractors).
  • The top three reasons cited for potential reductions in revenues and/or employment were:
    • Customer delays or cancellations;
    • Difficulty in obtaining equipment, supplies or logistical delays; and
    • Permitting and approval delays.
  • Of the 25% of respondents that indicated they expect to reduce workforce, most expected reductions of up to 20% of their employees.
  • The manufacturing segment of the industry expected more widespread and deeper revenue reductions than the industry segment that includes developers and installers who implement storage projects.

As evidenced by the survey results, it is clear the energy storage industry expects a deep, albeit brief, revenue downturn this quarter. Most companies are focused on retaining their employees during this time in order to better prepare and respond once business returns. However, ESA assesses these results are consistent with the possibility that respondents plan to defer significant workforce reductions until after the end of the second quarter, if conditions do not rapidly improve.

“The covid-19 pandemic has impacted the energy storage industry tremendously. While we still anticipate year-over-year growth, it is clear our industry is suffering with immediate and significant risks of workforce reductions and economic damage,” said Kelly Speakes-Backman, CEO of ESA. “These delays upend grid reliability and resilience efforts, just as we enter fire and hurricane season, and as states, towns, and utilities are beginning to incorporate energy storage systems as backup power to prevent power system disruptions for critical healthcare facilities. As such, ESA is actively seeking immediate relief from Congress and the Administration to relieve the financial stresses on our members and the industry, which represents more than 60,000 people, caused by the virus.”

In March 2020, ESA released initial survey results that showed covid-19’s impact on deployments was immediate and potentially devastating to the industry. At that time, 66% expected to incur delays soon. Of those delays, 44% were currently experiencing short-term (one month) impacts.

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