For more than a decade, the solar industry has rightfully focused on one objective: driving down the price of solar energy to make it an affordable, mainstream option for residents and businesses. In many ways, the industry has succeeded beyond any reasonable expectation. In 2011 the U.S. Department of Energy launched the SunShot Initiative to reduce the cost of utility-scale solar to $1 per watt by 2020. Though many viewed the objective as more aspirational than practical at the time, it was achieved three years early.
The dramatic drop in the cost of solar modules coincided with improvement in their performance. Today, some utilities can purchase new 600-watt solar panels for just $0.13 per watt. That’s a huge win for the climate and for electricity customers.
But continuous price declines pose challenges to utilities, renewable energy developers and other companies storing large quantities of solar panels. The volume of solar panels currently in warehouses is staggering. A recent report by Rystad Energy found that 40 gigawatts sit in storage across Europe — equal to the capacity installed across the continent in 2022. That number could grow to 100 gigawatts.
To put it simply, solar panels languishing in warehouses are doing nobody any good; they’re not generating carbon-free electricity or providing long-term cost savings and resilience. For the owners of all these panels, including utilities, keeping them in warehouses is more than a missed opportunity to tackle climate change and air pollution. It’s a cost sink.
“There’s a front-end cost for acquisition. It’s also likely that the modules have depreciated, given the shift in the market over the last year,” said AJ Orben, vice president of We Recycle Solar, the Arizona-based company that decommissions solar plants and recycles and resells modules. “The assets may have lowered in value by as much as 50 percent from when they were purchased. When the panels are not deployed, they are going to be sitting in warehouses where they are going to accumulate storage charges per pallet rate per month, which can quickly add up.”
Even casual observers of solar will recognize the familiar unfamiliarity of this development — the industry didn’t earn the moniker “solar coaster” by being predictable and consistent. The challenge of an overabundance of cheap solar panels in storage is the industry equivalent of a dog catching a car.
For those utilities facing a large inventory of solar panels that have depreciated in value since their purchase, the most important next step is to determine a strategy moving forward. An effective strategy should include one, or some combination, of three options:
Whatever option(s) utilities and developers ultimately choose, market forces are making it unsustainable to hold onto large quantities of stored solar panels. Having a plan is crucial — and working with an experienced partner makes a huge difference. Learn more about partnering with We Recycle Solar at werecyclesolar.com