Tax Benefits and Rebates for Solar Panel Recycling – ERI

Carbon, Energy, Solar, Waste Management

Tax Benefits and Rebates for Solar Panel Recycling – ERI

What happens when solar panels reach their end-of-life, usually between 25 and 30 years? In the rush to make rooftop solar panels affordable across the U.S., not as much thought went into what happens after. This became trending news in 2022 when California landfills started filling up with the panels.

California was one of the first states to offer subsidies through net metering to homeowners who had them installed on their roofs in the 1990s. Since 2020, all new homes, apartment buildings, and condos up to three stories high must have rooftop solar in California per Title 24. Plans are to have the state be completely free of carbon electricity by 2045.

Enter the 2020s and those initial solar panels have reached the end of their life cycle. Recycling them is still new, and it’s posing issues. On January 1, 2021, California started regulating end-of-life solar panels like other hazardous waste. This was meant to make it easier to recycle them, however, a search of Energy.gov shows that there are still just over a dozen companies that provide recycling of solar panels. Some of those only recycle crystalline silicon (c-Si) panels. Six facilities accept both c-SI and cadmium telluride (CdTe) panels.

The U.S. National Renewable Energy Laboratory (NREL) reported that the cost to recycle one silicon PV module was between $15 and $45 in 2021. Dumping a panel in the landfill was between $1 and $5. It’s easy to see why many opted for landfill disposal. That doesn’t make it right. We’re looking at ways to make solar panel recycling more effective and appealing to homeowners and business owners.

Who’s Responsible for Recycling End-of-Life Panels?

Some homeowners used leasing programs to place solar panels on their roofs and received net metering discounts from the electricity company that subsidized the costs. Others purchased solar panels outright. This can play a part in who is responsible for recycling the panels. If you purchased them outright, you have to recycle them. For people who leased panels, the solar panel company you leased from is likely contracted to remove them when the lease ends. However, there are other considerations.

Across the U.S., over a dozen solar companies have filed for bankruptcy and shut down. If the company that homeowners and businesses leased their panels from is bankrupt by the time the lease is up, there may not be a company left to remove those leased solar panels. Homeowners and business owners may end up having to pay for the cost of recycling their panels.

An Example of the Importance of Incentives

In Vermont, a family leased 12 panels from a start-up almost 13 years ago. That start-up was bought by iSun, who just filed for bankruptcy. The family has seven years left on their lease, and no one can say what will happen down the road. The contract states the Vermont start-up has to remove and take those panels back, but there’s no guarantee that the company will still be around in another seven years.

If they have to recycle the panels, Vermont’s current laws are that they can recycle them free as scrap metal IF the panel is composed of at least 80% metal. Otherwise, they have to dispose of them in the trash.

As trash, it’s $48 per cubic yard. Solar seemed great at the time. Like many people in similar situations, they wish federal and state agencies had carefully weighed future recycling plans when pushing to get people to embrace rooftop solar.

Are There Any Solar Panel Recycling Initiatives or Low-Cost Programs?

President Biden’s administration earmarked $20 million for the creation of longer-lasting solar panels and to come up with ways for better recycling of solar panels. There are tax incentives for having solar added to your home. It’s time for incentives to help with solar panel recycling. Yet nothing exists.

Solar panel recycling is a great way to add jobs across the country, and $82 million was invested to increase solar manufacturing and recycling in the U.S. It’s all been focused on growing the industry though, and not helping people who embraced solar power decades ago responsibly dispose of end-of-life panels.

Six states currently have laws in place that cover solar panel waste, including:

California: PV modules are handled as hazardous waste.
Hawaii: Solar panels are handled as hazardous waste.
New Jersey: Reuse solar panels by shipping them to low-income and establish recycling programs. Advanced Recover Fee is considered to be added to the cost of new panels.
North Carolina: Solar panel projects larger than 2 megawatts must have a decommissioning plan in place.
Washington: Creation of a manufacturer takeback program.

California AB 1238 is working on establishing a recycling fee that will be used to pay the cost of recycling panels. It’s been discussed for a year and was recently amended by the Senate, but it still hasn’t passed.

The government offers the 48C program for solar manufacturers who establish lines that can recycle solar modules, inverters, and batteries. With 48C ITC, tax credits are awarded to companies that meet U.S. Department of Treasury requirements. That creates business, which means job creation, but it doesn’t necessarily lower the cost of recycling for homeowners and businesses with rooftop solar panels to recycle.

How Could Tax Benefits Help?

We think one of the best ways to get solar panel recycling started is by offering tax benefits and rebates to help businesses and homeowners afford the cost of recycling. Some states are already looking into manufacturer takeback programs. Others are looking at one-time fees paid at the time of installation that go into a general fund that covers the cost of recycling in the future.

Something needs to happen to ensure valuable materials from the solar panels, wiring, inverters, and other components are not wasted. In the landfill, these metals could become a major headache centuries from now.

What Does the Future of Solar Panel Recycling Look Like?

Many states are starting to take a much closer look at solar panel recycling. In Vermont, H.47 is hoping to make any company or person who installs solar panels also have to have a decommissioning plan in place. That plan must be approved by the Public Utility Commission. No action has been taken since it was introduced.

Illinois passed a law to form a Renewable Energy Component Recycling Task Force in 2023.

Arizona’s HB 2133 was introduced earlier this year with hopes of establishing a solar panel disposal fund through the collection of installation fees.

Many states are looking into similar bills, but change is slow to come. It’s time for action, not more debates.

ERI has one of the nation’s most comprehensive solar panel recycling programs with locations across the U.S. for convenient shipping and transportation. Reach us online to learn more about starting a cost-effective solar panel recycling program in your state or setting up a takeback program for your solar company.