1. Introduction

The renewable energy sector plays a critical role in the global energy transition. Over recent years, the sector has experienced substantial growth driven by the increasing recognition of the need to address climate change, reduce carbon emissions, and achieve sustainable development goals. Governments and organizations worldwide are investing heavily in renewable energy to reduce dependency on fossil fuels, mitigate environmental impacts, and enhance energy security ^[1].

In recent years, the role of the renewable energy sector has expanded significantly. Advances in technology, reductions in costs, and supportive policies have accelerated the deployment of renewable energy sources such as solar, wind, hydro, and bioenergy. According to the International Renewable Energy Agency (IRENA), renewable energy capacity has been increasing at an average annual rate of over 8% in the last decade ^[1]. This growth reflects a shift from renewable energy being a supplementary energy source to becoming a central component of the global energy mix.

Renewable energy plays varying roles across different countries. The EU has been a global leader in renewable energy adoption, with countries like Germany, Denmark, and Spain achieving high penetration rates of renewables in their energy mix. The EU’s Green Deal and targets for carbon neutrality by 2050 further underscore the sector’s importance ^[2].

As the world’s largest renewable energy market, China has made significant investments in solar and wind power, aiming to peak carbon emissions before 2030 and achieve carbon neutrality by 2060 ^[3].

In the U.S., renewable energy sources are rapidly gaining importance due to federal and state policies, corporate commitments, and the declining costs of renewables. As the world’s largest economy, the U.S. renewable energy sector wields significant influence over the global environmental industry.

Despite having vast oil reserves, countries like Saudi Arabia and the United Arab Emirates are increasingly investing in renewable energy to diversify their economies and reduce reliance on fossil fuels. However, they still rely on fossil fuels ^[4].

The advantages of renewable energy are manifold: Firstly, it reduces greenhouse gas emissions and air pollution, contributing to improved public health and environmental sustainability. Secondly, diversification of energy sources enhances energy security by reducing dependency on imported fuels. Lastly, the renewable energy sector not only creates jobs but also stimulates technological innovation, ultimately driving economic growth.

The disadvantages of renewable energy include the intermittent nature of sources such as solar and wind, which necessitate sophisticated grid management and energy storage solutions to maintain reliability. Although costs are decreasing, renewable energy projects often require a substantial initial investment, posing financial challenges. Additionally, the renewable energy sector is vulnerable to supply chain disruptions, which can hinder the availability of critical components and materials, thereby affecting project timelines and financial performance.

The renewable energy sector has faced significant challenges in its supply chain since 2020, prompting a comprehensive analysis to uncover their origins. Similar to other industries, the renewable energy sector is subject to cyclical patterns influenced by governmental policies, investment patterns, and technological progress. Despite its promising long-term trajectory, the industry remains susceptible to fluctuations driven by various internal and external factors.

Supply chain disruptions within the renewable energy sector encompass interruptions in the flow of crucial materials, components, or services essential for the manufacturing and distribution of renewable energy technologies such as solar panels, wind turbines, and batteries. These disruptions, arising from natural calamities like earthquakes, geopolitical tensions, economic downturns, regulatory shifts, or unforeseen events such as the COVID-19 pandemic, often result in delays, increased expenses, and challenges in meeting market demands.

Among natural calamities, geopolitical tensions, economic downturns, regulatory shifts, and pandemic-related disruptions, all are ultimately critical due to their potential to cause significant project delays, increase costs, and impact the availability of essential components. However, pandemic-related disruptions, although rare, have more significant impacts than other disruptions such as labor shortages and transportation issues. These disruptions deserve research attention to enhance resilience, support technological advancement, and ensure the sector’s continued growth and contribution to global environmental and economic goals. Studying supply chain disruptions helps in developing strategies for resilience and better strategic planning. Understanding the causes and impacts of disruptions enables companies and policymakers to implement countermeasures, diversify supply sources, and develop contingency plans to mitigate risks.

Extreme climate events are increasingly likely, leading to frequent disruptions that can cause significant losses (Pathak et al. 2022). Natural calamities have impacts similar to pandemic-related disruptions. Studying pandemic-related disruptions can also help identify effective countermeasures for natural calamities.

Can supply chain disruptions in the renewable energy sector be prevented? Labaran and Masood ^[5] stated that Industry 4.0 technology has the potential to enhance green supply chain management within the renewable energy sector. Leveraging various Industry 4.0 technologies such as blockchain, Internet of Things (IoT), Big Data, and Artificial Intelligence (AI) can enable efficient supply chain management through real-time data and intelligent systems. The European Commission coined the term “Industry 5.0” ^[6]. Industry 5.0 integrates resilient, sustainable, and human-centric approaches in both organization and technology, surpassing the purely technological focus of Industry 4.0 ^[7]. However, while cyclical fluctuations in the renewable energy industry cannot be entirely eliminated, they can be mitigated. Thus, strategies to thrive during supply chain disruptions remain crucial for both entrepreneurs and government entities, and this research aims to tackle such challenges.

For example, the pandemic has significantly impacted both ongoing and operational solar projects due to supply chain and construction disruptions. The rooftop solar sector has been hit hardest, as it mainly comprises relatively smaller firms lacking the financial capacity to withstand the losses ^[8]. Throughout the COVID-19 pandemic, almost 75% of solar energy system companies in Africa remained operational, but during the lockdown, the majority anticipated facing insolvency ^[9]. Monitoring the financial ratios of renewable energy firms is essential to ensure their long-term viability.

2. Data Sources and Statistical Summaries

The panel data encompassed 17 listed companies in the U.S. stock market over two distinct time intervals, 2017–2019 and 2020–2021. The focus is on comprehensively evaluating the determinants impacting ROA within the renewable energy sector amidst supply chain disruptions that occurred in 2020.

The sample comprises listed companies within the renewable energy sector. Data sources include websites dedicated to solar and wind energy companies in the United States (Accessed on 7 December 2023: https://en.wikipedia.org/wiki/Category:Solar_en- ergy_companies_of_the_United_States, and https://en.wikipedia.org/wiki/Cate- gory:Wind_power_companies_of_the_United_States), as well as a section for U.S. stocks within the renewable energy sector from a finance website (Accessed on 7 December 2023: https://finance.sina.com.cn/stock/usstock/sector.shtml#c109m). However, exceptions exist. E.ON, a German multinational corporation headquartered in Germany, is included in our study based on its membership in the Dow Jones Global Titans 50 index and its presence on the list from Wikipedia.org. Similarly, JinkoSolar Holding Co., Ltd., a Chinese company, is encompassed within the sample despite its origin, as it operates factories within the U.S. and has issued stocks in the U.S. within the renewable energy sector. Companies with incomplete datasets spanning the period from 2017 to 2021 are excluded.

There are eight solar companies, one wind company, four bioenergy companies, one ocean wave energy company, two solar equipment companies, and one clean energy utility company in the sample. Table 1 presents descriptive statistics for the primary indicators of 17 companies during 2017–2019. Table 2 presents descriptive statistics for the primary indicators of 17 companies during 2020– 2021. Table 3 presents descriptive statistics for the primary indicators of companies with positive ROA from 2017 to 2019. Table 4 presents descriptive statistics for the primary indicators of companies with positive ROA from 2020 to 2021.

Table 1.

Descriptive statistics for 17 companies from 2017 to 2019

Comparing Table 1 and Table 2 reveals shifts in the characteristics of the 17 listed companies between the periods of 2017–2019 and 2020–2021. Compared to the former period, during the latter period, the mean ROA increases; the mean creditrating decreases; the mean currentratio increases; the mean debttoassets decreases, suggesting a decline in leverage; the mean averagetaxrate increases; the mean value of growth increases; and the mean R&D expense increases. Credit rating (creditrating) is quantified as interest expenses divided by the average outstanding debt balance. These findings indicate an overall improvement in the performance of listed companies during supply chain disruptions compared to the period preceding them. Why did the performance of listed companies improve during supply chain disruptions compared to the preceding period? This phenomenon may be attributed to the implementation of key strategies such as technological innovation, partnerships, and specialization. For example, in November 2019, SunPower Corp. (SPWR), a major U.S. solar panel manufacturer, announced it was exiting its manufacturing operations to concentrate on installing rooftop solar systems. In 2020, its ROA was 24.882, compared to 0.9795 in 2019.

Comparing Table 3 and Table 4 reveals shifts in the characteristics of six listed companies with positive ROA between the periods of 2017–2019 and 2020–2021. Compared to the former period, during the latter period, the mean ROA decreases; the mean creditrating decreases; the mean currentratio decreases; the mean debttoassets increases, suggesting an increase in leverage; the mean averagetaxrate increases; the mean value of growth decreases; and the mean value of R&D increases. These findings suggest that during supply chain disruptions, the listed companies with positive ROA tend to reduce their growth rate while allocating relatively more cash and borrowing additional funds to invest in R&D compared to the period prior to the disruptions.

Table 5 presents descriptive statistics for the primary indicators of eight solar companies from 2017 to 2019. Table 6 presents descriptive statistics for eight solar companies from 2020 to 2021. Table 7 presents descriptive statistics for one wind company from 2017 to 2019. Table 8 presents descriptive statistics for one wind company from 2020 to 2021. Table 9 presents descriptive statistics for four bioenergy companies from 2017 to 2019. Table 10 presents descriptive statistics for four bioenergy companies from 2020 to 2021. Table 11 presents descriptive statistics for one ocean wave energy company from 2017 to 2019. Table 12 presents descriptive statistics for one ocean wave energy company from 2020 to 2021.

Comparing Table 7 and Table 8 reveals shifts in the characteristics of listed wind companies between the periods of 2017–2019 and 2020–2021. Compared to the former period, the latter period shows a decrease in the mean ROA, a decrease in the mean creditrating, a decrease in the mean currentratio, and an increase in the mean value of growth. These findings suggest an overall decline in the performance of listed wind companies during supply chain disruptions compared to the preceding period. The deterioration in performance may be attributed to an expanding strategy during supply chain disruptions.

Table 8.

Descriptive statistics for 1 wind company from 2020 to 2021.

Table 10.

Descriptive statistics for 4 bioenergy companies from 2020 to 2021.

Descriptive statistics for 1 ocean wave energy company from 2020 to 2021.

Table 12.

Table 2.

Descriptive statistics for 17 companies from 2020 to 2021.

Comparing Table 9 and Table 10 reveals shifts in the characteristics of listed bioenergy companies between the periods of 2017–2019 and 2020–2021. Compared to the former period, the latter period shows an increase in the mean ROA, a decrease in the mean creditrating, a decrease in the mean currentratio, and an increase in the mean value of growth. These findings suggest an overall improvement in the performance of listed bioenergy companies during supply chain disruptions compared to the preceding period. Bioenergy production primarily relies on organic materials (biomass) which can often be sourced locally or regionally. This reduces dependency on international supply chains and mitigates the impact of global supply chain disruptions. The development and maintenance of bioenergy facilities may require less specialized and high-tech equipment compared to wind and solar energy systems. This could mean lower reliance on global supply chains for critical components.

Table 11.

Descriptive statistics for 1 ocean wave energy company from 2017 to 2019.

Descriptive statistics for 6 companies with positive ROA from 2020 to 2021

Comparing Table 5 and Table 6 reveals shifts in the characteristics of the listed solar companies between the periods of 2017–2019 and 2020–2021. Compared to the former period, during the latter period, the mean ROA increases; the mean creditrating decreases; the mean currentratio increases; the mean debttoassets decreases, suggesting a decline in leverage; the mean averagetaxrate decreases; the mean value of growth increases; and the mean R&D expense increases. These findings indicate an overall improvement in the performance of listed solar companies during supply chain disruptions compared to the period preceding them. Why did the performance of listed solar companies improve during supply chain disruptions compared to the preceding period? This phenomenon may be attributed to the implementation of key strategies such as technological innovation, partnerships, and specialization.

Comparing Table 11 and Table 12 reveals shifts in the characteristics of listed ocean wave energy companies between the periods of 2017–2019 and 2020–2021. Compared to the former period, the latter period shows an increase in the mean ROA, an improvement in the mean currentratio, a decrease in the mean debttoassets, an increase in the mean value of growth, and a decline in the mean R&D expense. These findings suggest an overall improvement in the performance of listed ocean wave energy companies during supply chain disruptions compared to the preceding period. The improvement in performance may be attributed to the adoption of new technology. Notably, Ocean Power Technologies Inc. reported an increase in intangible assets by USD 0.274 million in 2021. Ocean wave energy technology is less mature compared to solar and wind technologies; many ocean wave energy systems are still in experimental or early commercial stages. The harsh marine environment poses unique challenges, necessitating extensive testing and longer R&D cycles to ensure durability, reliability, and efficiency. The intangible assets recorded for 2021 are based on R&D expenses from previous years.