By Melissa Ann Schmid, marketing communication manager, EnergyBin
Solar panels, inverters, batteries and other components tend to have long lifespans and are made for durability. However, like every technology, PV hardware isn’t everlasting nor is it indestructible.
A big question on the minds of PV professionals who oversee asset portfolios is: When is the right time to repower?
The answer depends on the unique project circumstance. Most industry experts agree it’s time when power output has declined relative to expected projections. In many cases, the root cause of this scenario is aging PV hardware.
In this decade, more than 67 GW of solar capacity will turn 20 years old. The majority of these systems are located throughout Europe and the United States. These systems can and will perform for much longer than 20 years, yet several asset owners and managers are choosing to repower sooner than 20 years.
What’s driving the decision to repower?
Credit: Namaste Solar
The top two reasons to repower are falling hardware costs and rising demand for solar energy generation. Renee Kuehl, director of sales and marketing at EnergyBin, a B2B exchange, has observed sellers listing solar panels as young as one year old for resale.
“With the falling price of enhanced technology, many asset owners and operators are faced with the opportunity to replace existing hardware. If the decommissioned goods are in decent condition, we’re seeing companies post them for resale, which further offsets the cost to repower,” she said.
In the utility market, developers and IPPs seek to gain economies of scale and enhance energy yields. Laid Sahraoui, founder and managing director of R3 Tech, a global secondary market solutions provider based in Switzerland, consults utility-scale companies on repowering.
“Consider replacing some or all of the components when new hardware would offer better electrical and mechanical features — including potential induced degradation (PID), light induced degradation (LID), fewer hotspots, tension range, etc.,” he said.
Repowering is also trending in the commercial and residential markets. Businesses and homeowners are upgrading hardware to meet energy consumption levels and to access incentive programs. Additionally, the commercial market seeks to optimize the useful surface space to generate maximum energy yield.
“We’re seeing businesses utilize repowering as part of their overall environmental, social and governance (ESG) strategy,” Sahraoui said.
Within the residential sector, homeowners are grappling with increased energy bills and blackouts. Dean Holleman, supply chain manager at Meraki Solar, a Florida-based solar installer with offices throughout 30 states, has seen an increase in residential repowering projects.
“Homeowners are requesting newer, high-wattage modules and next-generation inverters as well as battery storage add-ons,” he said. “We’ve experienced increased interest since the Inflation Reduction Act’s extension of the 30% investment tax credit and expect that demand to continue through 2024.”
Sourcing new technology
Once the decision has been made to repower, it’s time to source new hardware. Sahraoui offers two high-level recommendations for upgrading technology. First, consider the physical space and surface area available. Second, review what stays and what goes from the existing system.
“Can any component be reused? If there is a component you’d like to reuse, consider compatibility with new hardware you intend to source,” he suggested.
Furthermore, Holleman suggests sourcing hardware from well-known brands with high performance ratings.
“Manufacturers with high bankability scores are more likely to stay in business in the long-term, which helps when replacement parts are needed,” he said.
Kuehl recommends sourcing new hardware in the fourth quarter of the calendar year.
“Many wholesale sellers post inventory at deep discounts in Q4 in order to clear warehouse space for new inventory to be delivered the next year. Such deals can lead to significant savings,” she said.
Resell or recycle old hardware
Credit: We Recycle Solar
Today’s secondary market provides a platform for solar companies to resell used PV hardware. Determining what from the existing system has resale value versus what should be recycled is a key part of the overall repowering project. In both Meraki and R3 Tech’s experience, most used solar equipment tends to have resale value.
“Used solar panels are generally in good condition, and buyer demand remains high. However, you’ll need to first inspect and test modules for failures such as hot spots, microcracks and abnormal degradation rates before reuse,” Sahraoui said.
Inspecting and testing modules helps to determine the resale value of used solar panels. R3 Tech recently tested 7,500 decommissioned modules that were seven years old and found the degradation loss was less than 3%, a rate better than the manufacturer’s projection. The above-average energy yield factors into a higher resale value.
Inverters may also have resale value, particularly if they’re in good working condition. However, those that are over 10 years old may need some level of refurbishment followed by quality control checks. Racking usually isn’t reused because it has been customized for the existing array. However, it can be recycled at scrap yards.
Batteries, specifically lithium-ion batteries, can be reused as well. R3 Tech has found that using secondhand batteries provides as much as a 3,000-cycle lifespan. Due to general wear, balance of system (BOS) components from existing PV systems unlikely have resale value. BOS components include wiring, cables, switches, enclosures, disconnects, combiners, surge protectors, breakers and electrical panels. These materials are better suited for recycling.
Calculating resale price
Secondary market prices tend to fluctuate, which means determining the resale price for secondhand PV modules, inverters and batteries takes some research. Just like in the primary market, demand affects pricing. And the condition of the goods affects pricing as well.
Kuehl suggests using third parties, such as appraisers, and referencing market spot pricing.
“In our research, we’ve observed used module prices at 50 to 75% less than new modules,” she said.
In the latest PV Module Price Index presented by EnergyBin, a report that tracks crystalline-silicon module prices within the secondary market, the average price ranged from $0.086 to $0.26 per watt for used modules between 120 and 435 watts.
Kuehl adds that several factors should be considered when determining the resale value of secondhand modules.
“These factors include wattage, age (i.e., how many years the modules have been in production), the number of busbars and quantity offered. Depending on the volume, you may want to offer pricing by the pallet, container and truckload,” she said.
Furthermore, the location of buyers can affect the price, as Sahraoui has observed.
“The United States tends to offer a 20 to 30% higher resale value than other countries. Whereas, European countries tend to apply competitive pricing,” he said.
For secondhand inverters and batteries, check commodity prices online. Exchanges and marketplaces host pricing data by region, brand and other categories.
Choosing a repowering service provider
For asset owners and operators ready to repower, choose a service provider wisely. Holleman recommends selecting a repowering service provider that has a reputation for quality of work.
“Consider the timing of work as well as the warranty length the provider offers. Strive to select an installing company with at least ten years of work experience,” he said.
Sahraoui advises a thorough review of the provider’s financial, technical, legal and operational strength.
“Specifically inquire about their experience with handling repowering projects. Ask for references. Request information about their company policy regarding reusing solar panels and inverters in good working condition as well as their policy for recycling equipment with no resale value,” he said.
Melissa Ann Schmid is the Marketing Communication Manager at EnergyBin where she oversees marketing initiatives for the growing wholesale solar B2B exchange. She completed a Master’s in International Business at Saint Mary’s University of Minnesota focusing her thesis research on strategic corporate social responsibility initiatives and the role of for-profit/non-profit partnerships in today’s global economy.
“In this decade, more than 67 GW of solar capacity will turn 20 years old. The majority of these systems are located throughout Europe and the United States. These systems can and will perform for much longer than 20 years, yet several asset owners and managers are choosing to repower sooner than 20 years.”
There’s the ‘thing’ 10 to 20 years ago panels were smaller and some of the ‘science’ that has gone into new panel architectures like PERC, IBC, shingling using larger solar cells and new cell interconnect technology have improved LID. It used to be accepted that most ‘premium’ panels would degrade 3% the first year of use and on average 1% degradation each year in use thereafter. So, back 20 years ago one could have a 200 watt panel that would lose 3% efficiency the first year and 1% efficiency for 19 years after. That 200 watt panel for the most part could still put out 157 watts. Today panels are larger on average 20 to 22 square feet for residential solar PV panels and from 26 to 32 square feet for utility scale solar PV panels. Today an ‘average’ residential solar PV panel is around 370 Watts and loses 2% efficiency the first year and on average 0.7% degradation each year after. So, a 370 watt panel today would lose 2% efficiency the first year of use to LID and 0.7% for the next (25 to 30) years of use. Right around 302 watts after 25 years of service to 289 watts after 30 years of use.
With solar PV farms the construction practices have changed over the years and the electronics are more robust to handle higher string voltages and the practice of building solar PV farms with 1.5 to 1 D.C. to A.C. buss voltages is allowing better haze and cloudy weather generation on a daily basis. The practice of moving from fixed ground mount to single axis tracking from east to west is netting from 2 to 4 hours of extra sun harvest each day. The inclusion of utility energy storage is allowing sites to capture, time shift and dispatch energy after the sun goes down and is often used as grid services like fast reacting frequency and voltage regulation of the grid. All of these options now and the cost of solar PV panels with incremental solar harvest efficiencies are pushing the replacement of old panels and technology with new panels and technology. Say a 10MWp plant of 20 years ago was upgraded to latest panels, TopCON type N at right at 23% efficiency, single axis tracking could use the same acreage to go from 7.89MWp after 20 years of in service use to right at 10.5MWp (and) from two to four more sun hours a day energy capture using the tracking to get more direct sun exposure every day, even cloudy days. The 20 year old panels even in “economies of scale” were something like $3.00/watt installed within these simple utility scale projects. Today sites of this size are using superior solar PV technology, generate more power that can be both dispatched and stored during the solar PV day and dispatched at night adding grid services revenues to help pay for the system sooner with at least two revenue streams from one system. A recent project with 100MWp, tracking and energy storage was constructed for right around $1.32/watt installed. Company First Solar has committed to powering their manufacturing lines using solar PV to substantially reduce electricity use or eliminate fueled generation use to manufacture their solar PV panels. The article mentions used panels being sold for $0.086/watt to $0.26/watt, could it be possible that First Solar could supply utility scale solar PV farms with panels near the $0.10/watt wholesale price point for “new” panels in the near future?