When projecting future solar PV decommissioning costs (Year 1, 5,10, and 25), we look at the three most significant cost functions of decommissioning a solar system.

• Labor Cost per Region and Inflation Considerations
• Hazardous Materials Processing Cost
• Expected Resale Value of Components (year 1, year 5, 10, and 25)

Regarding labor, it is and will remain as the highest cost function of decommissioning a solar PV system. And depending on which states or regions, Davis-Bacon (prevailing wage) rates will have a significant role in determining final labor cost.

As far as recycling and treatment of hazardous materials go, we can expect the price in 30 years to decrease incrementally. How much we're not sure. It will largely depend on the rate of efficiencies gained in solar panel recycling processes.

And lastly, we're left with the expected resale value of components, primarily driven by the module's ability to be reused. This difference is a $40/kW credit if the PV modules can be repurposed and resold, versus a cost of $100/kW to recycle the modules. The module's wattage, condition, and expected remaining lifespan play a role in its value.

Today, most decommissioned systems in the United States are due because PPA's are starting to reach their end term dates. The customer can have the option to extend the term, purchase the system outright, or have the equipment removed from the property. Coupled with underperforming or troubled inverters, some customers may find that tearing off the old to make way for the new seems to be the best path forward, whether solely for financial or a combination of legal considerations.

In the Base Case example provided in our recent publication with NREL https://www.nrel.gov/docs/fy21osti/78678.pdf, we established that the decommissioning cost of an example site of $300/kW will have inflated to $500/kW in year 25. 

This material has been prepared for informational purposes only and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your tax, legal, and accounting advisors before engaging in any transaction.

As a tested solar professional with over 12 years of EPC and O&M experience, I now focus on the increasing challenge of maintaining and, in some cases, decommissioning and repurposing aging solar assets deployed across North America.