U.S. installations of solar panels rebounded from the coronavirus pandemic with more than 19 gigawatts of total capacity installed in 2020, compared to about 13 gigawatts at the close of 2019. And, according to industry data, that number may quadruple over the next ten years. Further, given that the replacement rate of solar panels is faster than originally expected, a looming problem of solar waste at U.S. landfills may well be in our future. Used solar panels may end up in landfills rather than be recycled because current recycling costs are high. The International Renewable Energy Agency (IRENA)’s official projections claim that “large amounts of annual waste are anticipated by the early 2030s” and could total 78 million metric tons by 2050 based mostly on a 30 year life cycle for the solar panels.
Solar panels are mostly made of glass, which has low value as a recycled material, but they also have small amounts of valuable materials such as silicon, silver, and copper. In addition, solar panels contain heavy metals (cadmium, lead, etc.) that some governments classify as hazardous waste, which have expensive restrictions such as only being able to be transported at designated times and via select routes. Because solar panels are delicate, bulky pieces of equipment, specialized labor is required to detach and remove them to avoid their shattering to smithereens.
The U.S. government does not have a PV recycling policy and as such most solar waste ends up in landfills after cables and aluminum frames are removed. While the glass can be recycled, its second-use applications are limited because the glass contains metals. First Solar is the only U.S. solar panel manufacturer that has a recycling program, which applies only to its own products. The company has a global capacity of two million panels per year. It costs an estimated $20 to $30 to recycle one panel, which compares to a cost of $1 to $2 for sending that same panel to a landfill.
The volume of solar waste is expected to surpass that of new installations by 2031. By 2035, discarded solar panels could outweigh new units sold by 2.56 times, according to the Harvard Business Review. The levelized cost of solar energy, a measure of the overall cost of an energy-producing asset over its lifetime, could be four times the current projection when solar waste is factored into the calculation.
Solar Power Incentives
The Federal Solar Investment Tax Credit, which currently defrays 26 percent of solar-related capital expenditures for all residential and commercial customers (down from 30 percent during 2006 to 2019), has been instrumental in the growth of solar energy. After 2023, the tax credit will be reduced to a permanent 10 percent for commercial installers and will disappear entirely for home buyers. Therefore, sales of solar are expected to be high in the coming months, as buyers race to obtain the subsidy. Further complicating matters are expected actions by the Biden Administration and Congress to attempt to extend and enhance the tax credits, including a “direct pay” approach. This would enable companies with no tax obligation to secure payments from taxpayers for constructing solar installations.
Tax subsidies are not the only reason for solar power’s expansion. Over half of U.S. states have mandates that require a certain amount of renewable energy to be generated by specific dates. Some states even have explicit requirements for solar energy. California, for example, requires most new homes to have solar power installed on their roofs.
Because newer solar panels are more efficient and less costly than older ones, economic incentives are encouraging customers to trade their existing panels for newer ones, which increases the volume of discarded panels. Three variables are important in determining replacement decisions: installation price, compensation rate (i.e., the going rate for solar energy sold to the grid, often through “net metering” or other approaches), and module efficiency. If the cost of trading up is low enough, and the efficiency and compensation rate are high enough, most rational consumers will make the switch, regardless of whether their existing panels have lived out a full 30 years. Affecting a solar panel’s efficiency is the fact that each panel decreases by approximately one percent a year due to module degradation.
An analysis by Harvard Business Review considering the above factors found that early replacements of modules can produce 50 times more waste in just four years than IRENA anticipates, which translates to around 315,000 metric tons of waste, based on an estimate of 90 metric tons per megawatt weight-to-power ratio.
Repowering and Upgrading
Another area of used solar panels are systems that have been upgraded and repowered. Utility-scale solar investors are typically paid back at year seven. In year 12, they may repower the project and receive a new investment tax credit. This provision in the tax code means the panels might be replaced at least once over the course of the project’s lifetime, and much faster than their stated life expectancy. Upgrading panels well before their useful life is over will increasingly apply to residential and commercial solar rooftops because solar panels are also subject to weather damages. This compounds the waste problem.
According to SEIA, around 140,000 solar panels are being installed per day in the United States. Bloomberg NEF estimated that around 26,000 tons of PV panels will end up as waste this year. That number will grow into the millions of tons as solar panels reach their end-of-life in the 2030s. North America has over 80 gigawatts of solar installed and could see the number grow to over 400 gigawatts by 2030 if Biden’s zero-carbon future were to occur by 2035, as is his goal.
Other Waste Issues
The waste problem will affect other renewable-energy technologies, as well. For example, barring a major increase in processing capability, analysts expect that over 720,000 tons of large wind turbine blades will end up in U.S. landfills over the next 20 years. And, according to recent estimates, only five percent of electric-vehicle batteries are currently recycled—a lag that automakers expect to rectify as sales of electric vehicles continue to increase as much as 40 percent year-on-year. However, this is a looming unresolved problem.
Solar panels have finite lifespans; are difficult and expensive to recycle; and are being decommissioned in increasingly large numbers, driven by tax policies and efficiency gains that encourage it. The United States does not have a PV recycling program and the majority of used solar panels end up in landfills. It is not clear who will pay for the clean-up costs, which will be an issue before regulators shortly. Consumers need to realize that these costs are not included in the cost of solar generation currently and will eventually raise electricity prices for solar units and the cost of electricity to the system.