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December 01, 2023

Second life: Where do solar panels go to die?

Our research finds that panel reuse can generate profit and sustainability – but challenges remain.

First, the good news: Deployment of solar photovoltaic (PV) panels has risen massively throughout this century—and will continue to do so, by all estimates.

Now the bad news: As PV deployment grows, so will the volume of decommissioned PV panels. Their average lifespan of 30 years means that within a decade, this will become a significant problem. By 2050, the volume of decommissioned panels is projected to be 80% of the volume of newly installed panels. Panels contain recyclable materials (such as glass and aluminum) alongside trace amounts of hazardous substances (like lead and cadmium), so developing efficient recycling methods for these growing panel volumes is crucial.

Solar panels are often decommissioned before their useful life is over—technology marches on, and utilities opt for newer, more efficient replacement panels. Currently, these panels are sent to recycling in Europe and often to landfills in other regions, despite their significant remaining lifetime.

In a world trying desperately to achieve Net Zero, this seems wasteful. BayWa r.e., an O&M provider of solar PV panels, sought another path. The company decided to examine the business case for sending decommissioned panels to new homes for further use, rather than recycling or trashing them. Would it make business sense to sell used panels, thus innovating toward a circular economy? And would it be preferable from an environmental perspective?

As part of the TRUSTPV project, a consortium-led effort to improve PV panels, we worked with BayWa r.e. in investigating this business case, focusing on the Italian market as a test case. Our research revealed valuable lessons on the potential, but also the limitations, of a circular economy for solar PV.

The business case is there…

We found the business case for extending PV panel life by repurposing them for secondary applications is strong. To arrive at the necessary insight, we used revamping data from BayWa r.e. to develop six financial and operational scenarios. Almost all scenarios showed a strong business case—it turns out a significant amount of money and value is lost by directly recycling the panels.

Our findings showed that profitability strongly depends on the percentage of functioning panels that are eligible to be resold. This is because the cost of inspection and testing is assumed to be needed for all panels, regardless of whether they can be resold. Naturally, revamping projects with low failure rates provides the most profitable business opportunity.

… As is the sustainability case

We found even more good news: Data showed that reusing solar panels presents a stronger environmental case than recycling. Reusing solar PV panels appears to be better for the environment than using new panels. The environmental footprint of solar PV panels reused locally is about 50% lower than replacing them after 10 years, and about 30% lower than replacing them after 15 years. Even if repurposed panels are shipped around 10,000 km, their environmental footprint remains respectively 37% and 10% lower than buying them locally at the target destination. This makes for a strong case to invest in reuse, refurbish and/or repurpose from a sustainability perspective.

Challenges: Finding a market, risk exposure

In studying the business case for reuse, we did find drawbacks and challenges that must be overcome.

One such challenge is finding a market—preferably a local one, for both fiscal and sustainability reasons. As noted, the BayWa r.e. project studied Italy; we could not find a market for local reuse in the country for the volume of decommissioned panels that will become available.

Generally speaking, any profit-oriented application of solar PV will choose new panels. That’s because the net present value for reused panels tends to be lower than for new ones, due to used panels’ shorter technical lifetime. Additionally, space constraints are common in solar PV projects, so maximizing yield per space is a powerful driver.

An additional constraint is the raft of government incentives that prioritize new installations and exclude reuse solutions. Italy, for example, recently introduced a tax rebate equal to 50% of the PV system cost, including design, installation and materials, which can be spread over 10 years. This further incentivizes buying new panels.

Since the case for reuse was not strong in EU as things stand, we next examined other regions. A large buyer’s market (with yearly demand estimated at 500 to 600 MW for second-hand panels) is reported to exist throughout the Middle East, Africa, Latin America and the Caribbean. It’s safe to assume that second-hand solar PV trading platforms are exporting the panels to these regions, in which high sun radiation makes used solar PV panels an attractive option for decentralized electricity generation.

Buying motives in these regions include the need for affordable energy and connecting low-income and price-sensitive households to electricity. Used solar PV panels, in combination with second-life batteries, have the potential to bring clean electricity to unconnected households and replace expensive, polluting diesel and gasoline backup generators.

But exporting the panels brings certain risks, we discovered. The global second-hand trading market is fragmented, and it’s not transparent where the solar PV panels are sold and to whom, resulting in cases of criminal activity and illegal exports of solar PV modules that were marked as waste. This translates into high risk for suppliers, as they might be liable under emerging producer responsibility schemes.

Recommendations: Improving traceability, reforming policies

Our work with BayWa r.e. led to not only the insights already mentioned, but to several recommendations that could further improve both the business case and sustainability case for panel reuse.

For starters, in order to mitigate the risks of selling, providers need the ability to track used solar PV panels and build trusted partnerships with local players. Further research is required to understand which digital tracking solutions are most suitable to track each panel’s lifecycle and end of life. This should be coupled with the creation of partnerships in regions with a weaker product stewardship and recycling infrastructure, to ensure that panels are tracked and brought back for proper treatment. These steps would mitigate risk around illegal waste exports and the hazy fates of second-hand solar PV panels that are exported to other countries for reuse.

The European Union has ambitious plans with its Circular Economy Action Plan and a clear interest in keeping solar PV panels in Europe. But current EU policy is heavily geared toward recycling. As we learned in Italy, incentive and regulatory systems aren’t set up for reuse; in many jurisdictions, reused panels cannot be part of another system’s incentive system, and there are no clear guidelines for testing, certification and redistribution.

A European approach to product stewardship for PV panels is recommended to create a circular economy for these panels and to establish successful markets for used PV panels. Incentives and disincentives should be used to encourage participation in product stewardship. It is important to clearly define the phases and activities within the circular economy, such as when a used PV panel is exempted from being waste and eligible to be resold.

Standards are required for testing, certifying, and repairing used PV panels, as well as industry reporting and accreditation. Targeted engagement with potential consumers, the insurance sector, and PV panel manufacturers is recommended to understand the perceived barriers to used PV panels and develop solutions to mitigate these barriers in Europe.

This work was supported by funding from the EU’s Horizon 2020 Research and Innovation Programme under Grant Agreement No. 952957, Project TRUST-PV.

To learn more, visit the Sustainability section of our website or contact us.

Dr. Jan Konietzko

Manager, Sustainability Services, Cognizant

Picture of Digitally Cognizant author Jan Konietzko

Jan Konietzko is a sustainability expert on a mission to help organizations thrive within planetary boundaries. His focus is on life cycle assessment (LCA), circular economy strategies and decarbonization pathways.

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