(Bloomberg) -- One of China’s largest clean energy developers warned that solar installations will slow in coming weeks because of high prices and virus disruptions.

China Three Gorges Renewables Group, the wind and solar unit of China Three Gorges Corp., said there’s not much chance the company can install the large numbers of solar panels that are typical through the end of the year, according to a transcript of its earnings call released earlier this week. It cited a rise in module prices and the measures imposed to control China’s worsening outbreak of Covid-19 among the reasons.

China usually sees a solar installation boom toward year-end as developers, especially state-owned ones, rush to meet annual targets to align with the government’s call to boost renewables capacity. The country added a record 52.6 gigawatts of solar in the first three quarters of the year, almost the same as last year’s total installations of 54.9 gigawatts. But that’s still well short of the 100 gigawatts for the year expected by some government and industry forecasts.

China’s solar industry has been forced to contend with a surge in the cost of a key material, polysilicon, to its highest level in more than a decade. That’s driven up panel prices, delayed projects, and attracted government scrutiny. 

Annual Targets

Covid lockdowns in regions where the company has projects, such as Inner Mongolia and Qinghai, have also interrupted its operations, according to the transcript.

Although panel prices remain high, wind turbine costs in China have continued to decrease, making it more cost-effective versus solar, the company said. As such, it expects wind installations to rise from the fourth quarter, after the pandemic slowed the rollout in the first half.

Despite Three Gorges’ cautious outlook on solar, nationwide installations could still pick up through the end of the year. State-owned developers won’t want to miss their targets and risk not being granted the rights from local governments to build more next year, said Yishu Yan, an analyst at UBS Securities.

She said China should be able to add 85 gigawatts in 2022 as installations were already speeding up in September. And despite high module prices, many projects in northwestern China will still give decent returns given the better lighting conditions there. 

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