Is the solar industry ready for a wave of retirements?

However, completely dismantling a PV plant at the end of its life presents considerable costs and logistical challenges, raising the question of PV regeneration, which is the process of upgrading PV modules to more efficient solar technology while retaining the primary structure and grid connection system.

 

Many PV systems continue to operate beyond their original design life and remain economically viable for more than 30 years, while others are retired earlier, disrupting expectations of future volumes of obsolete modules.

 

Regardless, given the global solar PV capacity target of 75TW by 2050, there will certainly be a large number of structures, modules and equipment to be disposed of, and large tracts of land to be repurposed or restored, whether for decommissioning, recycling or reuse.

 

High-cost claims and solar graveyards

 

Compared to other areas of the solar industry, there is less information available on decommissioning. A Wood Mackenzie spokesperson told PV Tech Premium that the company “does not have any detailed information on decommissioning” and that other companies in the solar sector are aware of these issues.

 

Tom Miller is CEO of Cambridge Energy, which supplies prefabricated tracking PV structures called “Nomad” to some of the world’s most difficult areas to deploy solar. The company is also providing structures for a re-deployable solar-storage system called Release from Norwegian developer Scatec.

 

Miller said: “For most PV developers and supportive onlookers, the focus is on getting more PV onto the ground or rooftops as quickly as possible to make a profit, but few are focusing on the obvious issue 25 years from now that decommissioning costs could be three times higher than the initial commissioning costs.”

 

Preparation for a traditional solar farm typically requires deep pile driving and trenching, all of which need to be retrieved and the ground returned to its original state for proper decommissioning.

 

“Good luck with that, it’s impossible. We’ve talked about solar graveyards. It’s a nightmare.”

 

Globally, Miller believes the issue is widely ignored. For example, only half of US states have decommissioning requirements in their commissioning plans, and many of those were added only recently. It was this issue that led Cambridge Energy to develop a re-deployable solution that allows for quick and easy installation and retrieval using anchors rather than driving piles deep into the ground.

 

In some markets where the Nomad system has been deployed, such as India, Australia and some African countries, piles are often not possible during drilling due to the many rocks and boulders in the ground. Bolting, on the other hand, does not require cement or deep drilling, making this approach more feasible and suitable for decommissioning designs.

 

"If it is easy to relocate, then the recycling can be done outside the factory, you can take the model down and reuse the frame, rather than bulldozing everything - that would be a disaster."

 

Lessons from other industries

 

However, this is not to say that the power industry has completely ignored the issue. Decommissioning is also becoming a hot topic in Australia's mining industry, with concerns raised about costs and environmental impacts.

 

At the remote DeGrussa copper mine in Western Australia, a high-profile solar project has been decommissioned after just seven years of operation. The solar-storage system, owned by French energy company Neoen, first received widespread coverage in 2015 as a unique solution to power mining operations.

 

However, according to local sources, the mine's copper resources have now been exhausted and no other offtakers have been found for the project's solar power. The early and expensive decommissioning project has gained notoriety for its financial impact and expensive carbon offset figures. Although the project was seen as a groundbreaking one, the early end has set off alarm bells for some critics.

 

"There is a lot of pressure to ensure that the ground is pristine. The cost of decommissioning and remediation is very, very high in these markets."

 

Sarvesh Suri, director of infrastructure and natural resources for Africa at International Finance Corporation, said that in fact, the overall configuration of PV plants that have reached the end of their life has high value because these sites already have costly transmission infrastructure and substations. Therefore, he expects most projects to undergo a process of regeneration rather than extensive demolition.

 

"Even if the plant itself needs to be decommissioned and dismantled, it's unlikely that someone would completely uproot the plant and build a hotel or farm in its place."

 

Demolition costs

 

However, "except in rare cases, the cost of demolition is no higher than the cost of construction. The main cost is picking things up and moving them away," said Jenny Chase, solar analyst at BloombergNEF.

 

"Usually, this part of the cost is negligible, but if you have to dismantle and recycle all the materials, it's cheaper to landfill. Dismantling and transportation of course costs. Recycling costs are about $10.81-21.63 (10-20 euros) per module."

 

Nevertheless, analysis by the US National Renewable Energy Laboratory (NREL) shows that decommissioning plans lack consistency due to widely varying cost estimates.

 

According to the NREL's "Best Practices at the End of the Performance Period for PV Systems" report published in February 2021, the estimated decommissioning cost for a 1MW PV system is $368,000, while according to the guidelines published in May 2023 by the New York State Energy Research and Development Authority, the estimated cost is equivalent to $30,000 per MW. Although the two reports were published only two years apart, the cost estimates vary by a factor of 12.

 

Similarly, across all the relevant sources NREL has studied, the range of cost estimates is quite wide, said Taylor Curtis, a regulatory and policy analyst at NREL's Strategic Energy Analysis Center. This suggests that more research is needed to understand the true costs.

 

A major factor in the cost range is how comprehensive the land reclamation process is, which is often related to the type of terrain involved.

 

"Certainly, the requirements for remediating or reclaiming land and returning it to its original state are much higher on prime agricultural land than on industrial land."

 

Another key issue in estimating costs, which applies to the global photovoltaic industry, is the uncertainty about the value of equipment and materials a decade or two later.

 

This is also evidenced by another NREL report released in December 2021, "A Survey of Solar System Decommissioning Policies at the Federal and State Level in the United States": "The debate over allowing residual values ​​to be calculated in cost estimates ultimately comes down to concerns about overestimating the future value of PV system material recovery and PV equipment resale, and underestimating the costs of proper decommissioning and PV equipment disposal, thereby replacing reuse and recycling options."

 

Decommissioning in the UK and the United States

 

However, in some mature solar markets, decommissioning is also an aspect of solar development. The UK has incorporated decommissioning plans into its renewable energy process, and owners of such projects must submit decommissioning plans in their financing bids.

 

"Normally, decommissioning obligations are enough to focus people's attention," said Ross Fairley, partner and head of renewable energy at law firm Burges Salmon in the UK. "But the reality is that if you're building a solar project, sometimes the last thing you care about is what to do when it's over. The focus is immediately on construction, and a lot of solar projects tend to be sold back, so there's a question."

 

"Are developers spending enough time looking at long-term decommissioning obligations? Probably not."

 

Most property leases in the UK specify decommissioning conditions and obligations, and bonds are often used as security, Fairley said.

 

Similarly, more and more US states are getting involved in decommissioning. According to the Electric Power Research Institute (EPRI), only 14 US states had decommissioning requirements for large ground-mounted PV systems in 2021. Today, 29 states, more than half, have decommissioning policies that apply to PV systems.

 

Curtis said that US solar projects (80% of which were installed in the past seven years) are much younger than Europe's older plants, so people's attention is just beginning to turn to decommissioning issues.

 

"There are a lot of incentives for refurbishment or repowering versus decommissioning, such as leveraging existing permits, authorizations and grid connections at the same site, or leveraging existing relationships and partnerships," Curtis said, adding: "In some cases, decommissioning makes more sense, but we think there will likely be more repowering and refurbishment of existing projects rather than full system decommissioning."

 

The entire decommissioning issue dates back to the early history of the oil and gas industry, Curtis said. Specifically, in the United States, there are nearly 3 million unowned or abandoned oil and gas wells, and 500,000 unowned or abandoned mines, including rock, lithium and coal mines. This has brought long-standing community concerns and decommissioning policies into focus.

 

"That's why they want these policies to work for the massive growth in the wind and solar industries that we're seeing today." "We have to solve the decommissioning issue."