For more than a decade, the solar industry has rightfully focused on one objective: driving down the price of solar energy to make it an affordable, mainstream option for residents and businesses. In many ways, the industry has succeeded beyond any reasonable expectation. In 2011 the U.S. Department of Energy launched the SunShot Initiative to reduce the cost of utility-scale solar to $1 per watt by 2020. Though many viewed the objective as more aspirational than practical at the time, it was achieved three years early.
The dramatic drop in the cost of solar modules coincided with improvement in their performance. Today, some utilities can purchase new 600-watt solar panels for just $0.13 per watt. That’s a huge win for the climate and for electricity customers.
But continuous price declines pose challenges to utilities, renewable energy developers and other companies storing large quantities of solar panels. The volume of solar panels currently in warehouses is staggering. A recent report by Rystad Energy found that 40 gigawatts sit in storage across Europe — equal to the capacity installed across the continent in 2022. That number could grow to 100 gigawatts.
To put it simply, solar panels languishing in warehouses are doing nobody any good; they’re not generating carbon-free electricity or providing long-term cost savings and resilience. For the owners of all these panels, including utilities, keeping them in warehouses is more than a missed opportunity to tackle climate change and air pollution. It’s a cost sink.
“There's a front-end cost for acquisition. It’s also likely that the modules have depreciated, given the shift in the market over the last year,” said AJ Orben, vice president of We Recycle Solar, the Arizona-based company that decommissions solar plants and recycles and resells modules. “The assets may have lowered in value by as much as 50 percent from when they were purchased. When the panels are not deployed, they are going to be sitting in warehouses where they are going to accumulate storage charges per pallet rate per month, which can quickly add up.”
Utilities need a strategy for stored solar panels
Even casual observers of solar will recognize the familiar unfamiliarity of this development — the industry didn’t earn the moniker “solar coaster” by being predictable and consistent. The challenge of an overabundance of cheap solar panels in storage is the industry equivalent of a dog catching a car.
For those utilities facing a large inventory of solar panels that have depreciated in value since their purchase, the most important next step is to determine a strategy moving forward. An effective strategy should include one, or some combination, of three options:
- Repower existing power plants
Just a few short years ago, state-of-the-art panels barely topped 200 watts; today, the most advanced solar modules approach 600 watts. “The panel capacities are doubling or tripling over a 10-year timeframe,” Orben said. “Well before the asset is ready to be retired, it’s obsolete.”
Even if the panels sitting in a warehouse aren’t 600 watts, there’s a good chance that existing solar power plants could benefit financially by swapping out old panels for new. Repowering an older solar plant with new modules can quickly increase electricity generation and revenues. If aging inverters need to be replaced, consider replacing the older solar panels, too.
Repowering also provides an opportunity to add energy storage, which is becoming increasingly cost competitive and allows operators of solar power plants to participate in wholesale electricity markets and take advantage of energy arbitrage. - Access secondary markets
Utilities and solar developers with excess panels can consider selling to secondary markets, typically overseas. After repowering, older panels can be sold to meet the demand for solar in emerging markets. Utilities and developers can also opt not to repower and instead sell the relatively new modules to secondary markets. When that is the case, the secondary markets could be other projects in the U.S. - Recycle or properly dispose of panels
Solar panels, whether coming off older projects or stored with no plans for deployment, still need to be processed. Resale to secondary markets is a win-win because it can provide a second life for used panels and generate revenue for project owners. When that is not possible, however, panels can be recycled to harvest usable materials or properly disposed of. It’s not as simple as dumping excess solar panels in the landfill.
“Under federal law (RCRA), solar panels are considered hazardous waste,” Orben said. Improper disposal can result in fines and environmental damage. That’s where Orben and his team come in.
We Recycle Solar is the only company fully permitted by the U.S. Environmental Protection Agency to properly handle all hazardous secondary materials in solar panels, including lead and silver in silicon-based modules and cadmium and selenium in thin-film panels. They also work to extract valuable materials from the panels for recycling. In contrast to other recyclers, We Recycle Solar goes well beyond recycling aluminum frames and sending glass to a smelter. The company has the capacity to process 7,500 panels per day and the ability to extract a growing list of materials.
Whatever option(s) utilities and developers ultimately choose, market forces are making it unsustainable to hold onto large quantities of stored solar panels. Having a plan is crucial — and working with an experienced partner makes a huge difference. Learn more about partnering with We Recycle Solar at werecyclesolar.com
