Decommissioning Trends, Circular Economy Policy Incentives, and Secondary Markets for Solar Photovoltaics

Abstract

As solar PV deployment increases in the U.S., so will the volume of decommissioned PV modules and balance of system equipment, and large amounts of annual waste are anticipated by the early 2030s. Currently, there are over 65 GW of solar PV installed in the U.S., which is the equivalent of over 5 million tons of PV modules. In order to get ahead of this looming, as well as present challenge, our team has worked with the National Renewable Energy Laboratory (NREL) to conduct an in-depth study of material flow pathways from PV system decommissioning to secondary use applications and recycling in order to inform an evidencebased assessment of decommissioning trends and regulatory policy in the United States. Our study focused on four main themes: (1) an analysis of U.S. decommissioning policies and regulations, (2) an analysis of U.S. decommissioning costs, plans, and trends, (3) a comparative analysis of international decommissioning policies and regulations, and (4) a market analysis of the potential for a U.S. PV system circular economy. Decommissioning costs are still poorly understood but are expected to be a not trivial part of the total lifetime cost of solar PV systems. Our analysis of 24 decommissioning plans from 9 different states showed considerable variation in estimation methods and outcomes. The costs reported ranged from -$226,000/MW (for a project for which the value of salvage materials was expected to exceed costs) to $105,000/MW with an average of $9,525/MW. We concluded that it was not possible to do any further analysis or comparison across the entire set of plans, given the vastly different methodologies utilized. To support additional insights, we thoroughly reviewed each plan and separated the methods into three categories: Per unit; single number lump sum, and itemized lump sum. We then drew on our extensive knowledge of the plans to develop a set of confidence criteria that can be used to score a given decommissioning plan’s methodology. Transparency of methods and assumptions, strength of the estimator’s credentials, and inclusion of comprehensive set of components were the most important factors influencing our confidence in each plan. We ultimately found that our confidence was on average highest for plans using a per unit method, followed by plans using an itemized lump sum method. We had the least confidence in plans using a single number lump sum method. While we were able to develop qualitative metrics for confidence, it should be noted that it was impossible for us to judge the empirical accuracy of any particular method. This is because no reliable data on actual decommissioning cost currently exists. We concluded that filling this data gap as well as establishing a more standardized approach for estimating decommissioning costs would benefit both local planners and solar developers. Secondary markets and services for new, used, and end-of-life PV modules are becoming increasingly important to managing material flows and establishing a circular economy for PV modules. In the context of PV modules, secondary markets are the markets that facilitate transactions between buyers and sellers for goods that have already been sold into the primary market by a manufacturer, distributor, retailer, etc. Secondary markets are particularly useful for keeping PV modules in use that would otherwise be landfilled or recycled and for providing backup supply when primary markets face increased demand. As PV material flows out of secondary markets increase, it is imperative that those materials are managed responsibly under a circular economy system. Creating a U.S. PV system circular economy is in part dependent on the availability and affordability of solar PV module recycling services and economic value that module owners can recoup from selling PV modules to recycler or selling recycled module materials into recycled and commodity materials markets. Secondary market outlets and PV

module recycling services and materials markets are showing promising growth and traction, but will continue to face headwinds from improvements in PV technology performance, declining PV prices, government incentives for new systems, and consumer and regulatory skepticism towards used systems. In the absence of solar PV-specific waste laws in the U.S., and regulations mandating the collection and recycling of solar PVs at the end their useful lives, U.S. states and their local jurisdictions are beginning to develop their own processes of regulating the responsible management of solar PVs.1 As solar PV deployment increases in the U.S., so will the volume of decommissioning solar PVs within communities. Solar ordinances and decommissioning policies are becoming increasingly important considerations within U.S. State and local jurisdiction’s planning practices. Currently, there is little information about what purpose the policies are intended to serve from the local perspective. However, because such policies may have implications on the development of solar projects across the U.S., it is important to understand why U.S. states and localities passed solar decommissioning policies in the first place, what stakeholders are or should be involved in the development of such ordinances, and what impacts solar policies are having on the solar industry. By reviewing U.S. state and local regulatory frameworks and ordinances, the project team sought out to better understand how local communities are responding to increased renewable energy project developments and identify potential impacts state and local decommissioning policies may have on various stakeholders including developers, state and local authorities, landowners, and community members. Many international jurisdictions are wrestling with how to responsibly manage material flows of decommissioned and waste PV modules and energy storage technologies. Certain member countries of the European Union have robust materials management frameworks in place, and continue to refine regulations that govern these waste types. Other countries, such as Australia, China, and Japan, are taking steps to develop their own regulatory frameworks. While government officials are responsible for enacting and enforcing regulations governing solar and storage wastes, in virtually every jurisdiction we studied solar industry stakeholders played an important role in shaping solar and storage waste management policies. The importance of industry input on how waste management policies are crafted and contribution to developing the technologies, business models, and operational capabilities needed to manage secondary markets and waste material flows cannot be overstated. The research and analysis performed in this project is essential to the understanding and formation of a sustainable circular economy for solar photovoltaic energy generation. Our greatest desire is that this work informs and inspires many others in this impactful and promising field.