The demand for recycled solar photovoltaic (PV) panel components is set to skyrocket in the coming years as the number of installations surges and the threat of a supply bottleneck looms. Rystad Energy analysis shows recyclable materials from PV panels at the end of their lifespan will be worth more than $2.7 billion in 2030, up from only $170 million this year. This trend will only accelerate in the coming decades and the value of recyclable materials is projected to approach $80 billion by 2050.

PV recycling is still in its infancy but is seen as an essential element of the energy transition, with solar PV waste projected to grow to 27 million tonnes per annum by 2040. Our forecasts show that recovered materials from retired panels could make up 6% of solar PV investments by 2040, compared to only 0.08% today.

Landfills are an easy and cheap option as current resale prices for recycled solar PV materials do not compensate for the transportation, sorting and processing costs. Yet, the rapid growth rate of large-scale utility farms within solar energy can change this. The material supply side is expected to encounter bottlenecks with the growing demand for minerals, and recycling can be a supply relief as panels reach the end-of-life stage.

“Rising energy costs, improved recycling technology, and government regulations may pave the way for a market where more defunct solar panels are sent to recycling rather than the nearest landfill. Recycling PV panels can help operators save costs, overcome supply chain woes and increase the likelihood of countries meeting their solar capacity goals,” says Rystad Energy analyst Kristin Stuge.

Image courtesy of Rystad Energy

Demand for the materials and minerals used in solar PV is set to climb with the energy transition, with higher prices a likely result. The International Energy Agency’s net-zero emissions scenario targets 40% of the world’s power in 2050 being generated by solar energy – equivalent to 19 terawatts (TW). However, our 1.6 degrees Celsius (°C) scenario predicts that 53% will be solar-generated, a trend seen in the numbers and size of plant installments.

By assuming a 15-year lifespan of a PV panel and analyzing installation activity in 2022, we can estimate which regions and countries will benefit most from recycling PV materials in 2037. China is set to account for 40% of global installations this year, and when these panels mature in 15 years, the estimated recycling value will be $3.8 billion, out of a $9.6 billion global total. India – another Asian solar PV powerhouse – will trail in second place with an estimated $800 million in value, followed by Japan with $200 million in estimated value. Trailing the Asian continent, the value of recyclable material in North America in 2037 is projected to be worth $1.5 billion, with Europe set to hold $1.4 billion.

What can be recycled?

The panel components with the highest value are aluminum, silver, copper and polysilicon. Silver accounts for about 0.05% of the total weight but makes up 14% of the material value. Polysilicon is obtained through an energy intensive process to achieve the concentration needed for solar panel efficiency, reflected in the relatively high resale price. The greatest volume of material is glass, which has a high recycling rate but relatively low resale value.

An influx of minerals is necessary to decarbonize global energy systems and prevent valuable material loss in standardized waste streams. Rystad Energy’s 1.6°C scenario estimates peak solar energy implementation in 2035 of 1.4 TW. By that time, the PV recycling industry can supply 8% of the polysilicon, 11% of the aluminum, 2% of the copper, and 21% of the silver needed by recycling PV panels installed in 2020 to meet the demand for materials. This recovery potential can ease strains on the mining sector and reduce the solar PV panels’ carbon footprint. The process of refining copper releases about 4 tonnes of carbon dioxide (CO₂) per tonne of copper and is, together with the broader mining industry, a significant source of greenhouse gas emissions. Potential future carbon taxes can change the cost situation with significant value gains for the recycling industry.

How are materials recycled?

The first step of PV panel recycling is disassembly, where the aluminum frame and junction box are separated from the panel, ground into pieces, and sorted by material. There are PV disassembly machines on the market today, including one by Japan-based NPC, which separates the panel parts even further before grinding the remains, enhancing the recovery rate for materials. With evolving technology, the market is gradually perceived with greater enthusiasm, and new companies are emerging, such as the US-based start-up SolarCycle, which has generated significant seed funding from investors.

Technology, policy and economic viability are both barriers and solutions to evolving circularity of minerals in the PV panel industry. Regulatory mechanisms can be an efficient tool to create rapid change, as we have already seen in the European market and through some initial attempts in the US at the state level. Ultimately, bottlenecks and long lead times in raw material mining could turn solar PV recycling into an economically viable industry in the coming decades.

Maxeon Solar Technologies, a major PV module producer based in Singapore, revealed the results of a third-party energy payback performance evaluation of its Maxeon 3 panels in its 2021 annual sustainability report. 

Energy payback is the period required for a renewable energy system to generate the same amount of energy that was used to produce the system itself. The assessment considers the cumulative energy demand over all the life cycle stages of solar panels and considers local grid efficiencies for different global locations. 

The test found that Maxeon 3 solar panels had an energy payback period ranging from 0.13 to 0.45 years for ground mounted module, and 0.27 to 0.92 years for a residential rooftop system. For ground mounted panels, the energy payback period can be as little as 47.5 days. 

Spread over the 40-year performance warranty on the panels, the energy output exceeds the input more than 100 times over its lifetime, marking a significant milestone for the sustainability of PV technology.

The New Jersey Board of Public Utilities (NJBPU) today approved Community Energy Plan Grants (CEPG) for 46 municipalities throughout New Jersey, totaling $820,000. In late 2021, the Board redesigned the program to incorporate a greater emphasis on equity and overburdened municipalities. The redesigned program also simplified the grant application process and reduces barriers to program utilization.

The CEPG program empowers local communities to create community energy plans that align with the State’s Energy Master Plan, the roadmap to reaching Governor Murphy’s goal of 100% clean energy by 2050. The program encourages communities to create localized community energy plans to combat climate change with a specific focus on equitable access, energy resilience, renewable energy and efficiency.

“Municipalities have tremendous authority over our energy future,” said Randall Solomon, executive director of Sustainable Jersey. “We are grateful for the opportunity to partner with the Board of Public Utilities to create a program that helps municipalities comprehensively identify and implement strategies to address climate change and build a sustainable energy future.”

Sustainable Jersey will be providing technical assistance to grant applicants and in the creation of community energy plans for overburdened municipalities.

There are two grant award levels in the redesigned program. All municipalities are eligible for $10,000 awards. However, overburdened municipalities are eligible for a larger award of $25,000, as well as enhanced support, including technical assistance to develop and submit an application and assistance in creating a plan if a grant is awarded. Overburdened municipalities were defined using both the Department of Environmental Protection’s “Overburdened Community” census tract data and the New Jersey Department of Community Affairs’ Municipal Revitalization Index.

In awarding the grants, the Board found that the 46 municipalities all submitted complete applications and thus were eligible to receive a grant. Overall, 24 of the 46 approved applications are from overburdened municipalities. By redesigning the grant program, the Board was able to increase access to communities who historically have had a low participation rate in State clean energy initiatives and move closer to reaching Governor Murphy’s clean energy goals.

Frank and Angela Haynes wanted to put solar panels on their century-old home in Albany, about 20 miles west of St. Cloud.

Frank Haynes worked for an electric utility years ago, when most electricity was produced by burning coal. He knew that solar is becoming an affordable energy alternative to reduce fossil fuel use, which produces greenhouse gasses that contribute to climate change.

“There really aren’t many ways that individuals can do that, so we felt that it was something that we could do,” he said. “Everybody’s got to do a little something.”

In hindsight, Haynes said he probably should have been a little more cautious when choosing a solar company.

Haynes said he clicked on an online advertisement about solar energy and contacted Brio, a Utah-based solar sales company. A few months later, he signed a contract for a rooftop solar energy system.

It was a frustrating experience, he said, marked by numerous delays and frequent staff turnover that made it difficult to get answers.

“From August, we didn’t have a working system until nine months later,” Haynes said. “And there were huge gaps in there, like months and weeks where we didn’t hear from them at all.”

Last month, Minnesota Attorney General Keith Ellison announced he is suing four Utah-based solar companies: Brio Energy, Bello Solar Energy, Avolta Power and Sunny Solar Utah. The lawsuit also names three company executives.

Ellison said the companies led customers to believe they were affiliated with their local utility. He said they used high-pressure sales tactics to convince customers to sign binding contracts, and threatened legal action if the homeowners tried to cancel.

Assistant attorney general Kirsi Poupore said the companies’ executives instructed sales staff to exaggerate the financial benefits of solar panels, especially to elderly homeowners.

Brio, which has since changed its name to Avolta, didn’t respond to an emailed request for comment.

Lawsuits welcomed

Some advocates of solar energy say they welcome the lawsuits against unethical companies that put the industry’s reputation at risk.

“Anything that we can do to eliminate bad actors and mitigate harms to consumers is the best thing to do for the long-term success of our industry,” said Logan O’Grady, executive director of the Minnesota Solar Energy Industries Association, a trade group with 145 members in the solar and energy storage industries.

There are plenty of reputable companies doing business in Minnesota, said Bobby King, state director of Solar United Neighbors, a nonprofit solar purchasing cooperative. He recommends getting multiple bids and references, and shopping around for financing before choosing an installer.

“I also wouldn’t sign anything until someone’s visited your home, looked it over, and then come back to you with a proposal based on that visit,” King said.

All-Energy Solar, a St. Paul-based solar designer and builder, has been asked to fix some of the faulty systems. CEO Michael Allen said experienced solar companies can provide a precise estimate of how much electricity a system will generate at a given location using weather data.

“We can tell you exactly how much sun is going to shine in St. Paul, within reason, year over year over year,” he said.

Solar is an investment a homeowner will live with for the next 20 to 30 years, Allen said, so it’s important to pick a company that will be around for the long term.

“What we’re finding that’s really sad, as we’re fixing a lot of these problems and customers’ issues, is that they don’t even know who they actually ultimately contracted with,” he said.

Another obstacle many home and business owners have encountered is a delay in getting small solar projects connected to the electrical grid.

Earlier this year, Minnesota’s utility regulators told Xcel Energy to work to clear the backlog of projects that have resulted in delays.

There has been some improvement in the wait times since the Minnesota Public Utilities Commission made some adjustments to the approval and connection process, O’Grady said.

Happy with his choice

Despite the setbacks, Haynes said he’s still glad he chose solar energy. The system on the roof of his garage is now producing between 40 to 60 percent of his electricity.

Haynes’ system cost $22,000 after a 26 percent federal tax credit. In eight to ten years, he expects it will pay for itself with savings on his electric bill.

“Our payment for the solar system is less than our average electric bills,” he said. “And at the end of 10 years, we’ll own it, and it’ll still be going for another 15 years.”

Haynes isn’t part of Ellison’s lawsuit. But he did contact the attorney general’s office to share his experience, which he said wasn’t all negative. Brio paid for damage to his lawn that occurred during installation, and for his electric bill during the time the panels weren’t working, he said.

Haynes said he probably paid more for his solar system than he would have if he’d done his research first. But for him, knowing that the solar panels will be producing clean electricity for years to come makes that investment worthwhile.

“We would do it again, because we have more motivation than just the money,” he said.

Despite rising costs and supply chain woes, U.S. residential solar continued to grow nearly 30% year-on-year in 2021, reaching a record-breaking 4.2 gigawatts (GW) of new installations. A sizeable chunk of that business went to Freedom Forever. The California-based solar installer has secured 3.9% of the U.S. residential solar market share last year, overtaking Tesla in the top three for the first time, says Wood Mackenzie.

Some of that is by design, notes Wood Mackenzie research associate Caitlin Connelly:

“Freedom Forever’s installation volumes grew a massive 80% in 2021, and the company entered 12 new state markets. Simultaneously, Tesla has become increasingly dependent on subcontractors for solar installations as the company shifts its business model more towards that of a full-suite technology supplier. Given these two factors, we expect to see Tesla continue to decline in the installer rankings over the next several quarters.”

At its current rate, Freedom Forever’s growth puts pressure on runner-up Titan Solar Power’s position (4.8% market share) going into 2022. While Titan managed to grow installation volumes and market share in 2021, its growth is significantly smaller compared to previous years. As large regional installers with expansive networks, Titan and Freedom Forever often compete for sales volumes, and their operations overlap in 15 state markets.

Additionally, both companies follow similar business models that rely solely on third-party sales companies. Outsourcing sales to third-party companies – a customer acquisition strategy also used by Sunrun – continues to be a popular tactic for top installers looking to create efficiencies as they expand their geographic footprints.

For the fifth consecutive year, publicly-traded Sunrun maintains its top residential installer position, securing 13% of the total market. However, Sunrun’s market share is down nearly a point since 2020 – the second year in a row the company experienced market share declines. Although both Sunrun’s direct and indirect installation volumes continue to grow, flat Q4 volumes attributed to Omicron-related labour shortages ultimately hurt their market share for 2021.

“While Sunrun still maintains a comfortable lead, the rising pressure on the company’s growth rate is a testament to the unyielding momentum of other top players,” Connelly says.

Together, Sunrun, Titan Solar Power, and Freedom Forever command over 20% of the US solar residential market.

Further down the Leaderboard, competition continues to intensify. In the latest example of consolidation in the residential market, SunPower announced the acquisition of Blue Raven in October 2021. In 2020, SunPower and Blue Raven made up 1.4% and 1.0% of the total market respectively. Heading into 2022, the combined entity SunPower holds 2.7% of the total market, settling comfortably ahead of both Momentum Solar (#6 with 2.2% market share) and Trinity Solar Power (#7 with 2.0% market share).

Connelly said: “The acquisition of Blue Raven strengthens SunPower’s direct installation business, expanding their geographic footprint for direct installs from eight to 19 states. SunPower has noted that direct installs are central to expanding service options and revenue streams.”

The residential finance market is also consolidating. The top five largest players financed over 70% of the residential market in 2021, up from 60% in 2020. Market consolidation ramps up competition between financiers, driving down interest rates and dealer fees.

• GoodLeap held onto its position as the top financier and loan provider, capturing 26% of the total market.
• Sunrun leads the third-party owned (TPO) market, capturing 15%.

While TPO capacity volumes grew in 2021, loan volumes continue to dominate new growth and now represent over 60% of the market. Wood Mckenzie expects this trend to become the norm over the next couple of years before the investment tax credit expires for customer-owned systems in 2023.