The outbreak of the Coronavirus in China and the subsequent complete lockdown of cities such as Wuhan, Huanggang or Ezhou may pose a substantial risk to global solar supply chains, as these measures could weigh on manufacturing productions if there is an extended period of closure, Fitch Solutions said.

Partial lockdowns in cities like Shanghai or Beijing, border closures and announcements for extended work breaks, also affect the solar sector, the researchers said in an analysis on downside risks to solar manufacturing and global growth posed by the virus.

“This risk is prominent particularly as Chinese solar manufacturing accounts for approximately 70% of the global market share since 2019,” the analysts said.

“The top three largest solar manufacturers in the world – Jinko Solar, JA Solar, and Trina Solar, also have most of their manufacturing bases located within China.”

Trina Solar, for example, has to keep its solar manufacturing base in Hubei closed until Feb. 14 due to official provincial announcements.

While some of these companies have already diversified their manufacturing bases abroad, Fitch Solution stresses that the output level in these markets still pales far in comparison to China.

If the spread of the Coronavirus worsens, risks to production could increase, prompting panel prices to go up as the oversupply from China would diminish.

“Should production be implicated significantly beyond the next few months, it is likely that these prices might stagnate or even rise in the near-term, which could then weigh on profit margins for developers, posing some downside risks to solar growth.”

The outbreak has also affected the Chinese wind sector, with a Shanghai Electric senior executive being among the first victims in Beijing.