The Business Case For Renewable Energy Adoption In Montpellier – Summary. Solar energy is a rapidly growing market, which should be good news for the environment. Unfortunately there is a catch. The replacement rate of solar panels is faster than expected and given the current very high recycling costs, there is a real risk that all used panels will go straight to landfill (along with equally expensive wind turbines difficult to recycle). Regulators and industry players need to start improving the economics and scale of recycling capabilities before the solar panel avalanche hits.
It’s sunny time for solar energy. In the US, home installations of solar panels have fully recovered from the Covid downturn, with analysts forecasting more than 19 gigawatts of total installed capacity, compared to 13 gigawatts at the close of 2019. Over the next 10 years, that number can be quadrupled. according to industry research data. And that’s not even taking into account the further impact of potential new regulations and incentives launched by the green-friendly Biden administration.
The Business Case For Renewable Energy Adoption In Montpellier
Solar’s performance against the pandemic is largely due to the Solar Investment Tax Credit, which covers 26% of solar-related expenses for all residential and commercial customers (down from 30% during 2006-2019). After 2023, the tax credit will drop to a permanent 10% for commercial installers and disappear entirely for home buyers. Therefore, solar sales will probably be even hotter in the coming months as buyers race to cash in while they still can.
Electrical Energy And Power Systems
Tax subsidies aren’t the only reason for the solar boom. Panel conversion efficiency has improved by up to 0.5% annually for the past 10 years, even as production costs (and thus prices) have fallen significantly, thanks to several waves of manufacturing innovation, driven largely by the dominant Chinese panel manufacturers. from the industry. . For the end consumer, this means much lower initial costs per kilowatt of energy produced.
This is all good news, not just for the industry, but for anyone who recognizes the need to transition from fossil fuels to renewable energy for the future of our planet. But there is a massive caveat that very few are talking about.
Economic incentives are rapidly being aligned to encourage customers to trade in their existing panels for newer, cheaper and more efficient models. In an industry where circular solutions such as recycling remain woefully inadequate, the sheer volume of discarded panels will soon pose a risk of existentially damaging proportions.
To be sure, this is not the story being told by official industry and government sources. Official forecasts from the International Renewable Energy Agency (IRENA) claim that “large amounts of annual waste are expected in the early 2030s” and could reach 78 million tons by 2050. That’s a staggering amount, to be sure. But with so many years to prepare, it describes a multibillion-dollar opportunity to recover valuable materials rather than a dire threat. The threat is hidden by the fact that IRENA’s forecasts are based on customers keeping their panels in place for their entire 30-year life cycle. They do not take into account the possibility of extensive early replacement.
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Our research does. Using real US data, we modeled the incentives that influence consumers’ decisions about whether to substitute under different scenarios. We hypothesized that three variables were particularly salient in determining replacement decisions: installation price, offset rate (ie, the drive rate for solar energy sold to the grid), and module efficiency. If the cost of trading is low enough, and the efficiency and compensation rate are high enough, we assume that rational consumers will make the switch, regardless of whether their existing panels have lived a full 30 years.
As an example, consider a hypothetical consumer (call her “Mrs. Brown”) living in California who installed solar panels on her home in 2011. Theoretically, she could keep the panels in place for 30 years, i.e. ie, until 2041. at the time of installation, the total cost was $40,800, 30% of which was tax deductible thanks to the Solar Investment Tax Credit. In 2011, Ms. Brown could expect to generate 12,000 kilowatts of power through her solar panels, or roughly $2,100 worth of electricity. In each subsequent year, the efficiency of its panel decreases by approximately one percent due to module degradation.
Now imagine that in 2026, halfway through the life cycle of her equipment, Ms. Brown starts looking at her solar options again. She’s heard that the latest generation of panels are cheaper and more efficient—and when she does her homework, she finds that’s very true. Going by the actual current forecasts, Ms. Brown in 2026 will find that the costs associated with purchasing and installing solar panels have dropped by 70% from where they were in 2011. Additionally, the new-generation panels will bring in $2,800 in annual revenue, $700 more than its existing configuration when it was new. However, upgrading her panels now instead of waiting another 15 years will increase the net present value (NPV) of her solar equipment by more than $3,000 in 2011 dollars. If Ms. Brown is a rational actress, she will opt for an early replacement. And if she was particularly smart about money, she would have made that decision even sooner—our calculations for Ms. Brown show that replacing NPV exceeds that of retaining the panel starting in 2021.
If early replacements occur as predicted by our statistical model, they could produce 50 times more waste in just four years than IRENA predicts. This figure translates to about 315,000 metric tons of waste, based on an estimate of 90 tons per MW weight-to-power ratio.
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As alarming as they are, these statistics may not do full justice to the crisis, as our analysis is limited to residential installations. With commercial and industrial panels added to the picture, the scale of replacements can be much, much larger.
The industry’s current containment capacity is woefully unprepared for the deluge of waste that is likely to come. The financial incentive to invest in recycling has never been very strong in solar energy. While the panels contain small amounts of valuable materials such as silver, they are made mostly of glass, an extremely low-value material. The long lifespan of solar panels also serves to discourage innovation in this area.
As a result, the solar power generation boom has left its recycling infrastructure in the dust. To give you some indication, First Solar is the only US panel manufacturer that we know of with an ongoing recycling initiative that applies only to the company’s own products with a global capacity of two million panels per year. At current capacity, it costs about $20-$30 to recycle a panel. Sending the same panel to a landfill would only cost $1-$2.
However, the direct cost of recycling is only part of the end-of-life burden. Panels are delicate, large devices usually installed on roofs in a residential context. Specialized work is required to detach and remove them so they don’t break apart in the pit before they get into the truck. In addition, some governments may classify solar panels as hazardous waste, due to the small amounts of heavy metals (cadmium, lead, etc.) they contain. This classification carries with it a number of expensive restrictions – hazardous waste can only be transported at certain times and through selected routes, etc.
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The totality of these unforeseen costs can suppress industry competitiveness. If we plot future installations along a logistic growth curve limited to 700 GW by 2050 (NREL’s estimated ceiling for the US residential market) alongside the early replacement curve, we see that the volume of waste exceeds that of new installations by 2031. By 2035, discarded panels will exceed new units sold by 2.56 times. In turn, this would catapult LCOE (levelized cost of energy, a measure of the overall cost of an energy-producing asset over its lifetime) to four times the current forecast. The solar economy – which looks so bright from the vantage point of 2021 – would quickly darken as the industry sinks under the weight of its own garbage.
It will almost certainly fall to regulators to decide who will bear the cleanup costs. As the debris from the first wave of early replacements piles up in the coming years, the US government—starting with the states, but likely escalating to the federal level—will introduce legislation for solar panel recycling. It appears that future regulations in the US will follow the model of the European Union’s WEEE Directive, a legal framework for the recycling and disposal of e-waste across EU member states. US states that have enacted electronics recycling legislation have largely adhered to the WEEE model. (The directive was amended in 2014 to include solar panels.) In the EU, recycling responsibilities for past (historical) waste have been allocated to producers based on current market share.
A first step to prevent disaster could be for solar panel manufacturers to start lobbying for similar legislation in the United States right away, rather than waiting for solar panels to start clogging up landfills. In our experience in drafting and implementing the revision of the original WEEE Directive in the late 2000s,
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