Product stewardship for solar panel waste is coming. While the Commonwealth Government has recently rejected a voluntary product stewardship scheme proposed by the Clean Energy Council, it has also told industry to come up with a new scheme by June 2022. We discuss the issue of solar panel waste, product stewardship and the direction Commonwealth regulation is heading. We also look at opportunities for local governments to help shape the future of solar panel waste solutions.

Key points

End of life recycling for solar panels is an area of future policy development:

  • solar panels require end of life recycling or disposal to deal with their constituent parts safely. At present most solar panels are disposed of in landfills, which can cause serious environmental harm;
  • the Commonwealth Government and industry are committed to addressing this through a product stewardship scheme, however, the details of such a scheme are still to be worked out, with a deadline set for June 2022; and
  • there has been little discussion on the role of local governments, who can and should encourage the establishment of solar panel recycling capabilities.

Solar panel waste snapshot

Currently, solar PV produces 35.8% of Australia’s renewable energy and accounts for 9.9% of Australia’s total energy generation. The majority of solar power is generated by small-scale systems, including residential rooftop systems. Queensland leads the way in solar uptake, hosting three of the top five large-scale solar farms, and five of the top ten postcodes for small-scale systems.

Unfortunately, a concerning proportion of solar panel waste ends up in landfill, amounting to 6 to 7 million tonnes annually. With the significant uptake in solar over the past decade, and an average lifespan for a panel of 21 years, the amount of solar panel waste has the potential to increase exponentially.

While there are some businesses that now offer large-scale recycling capability, they remain limited in number. A uniform, national approach to solar panel waste, building on existing industry-led initiatives and market incentives, is necessary to ensure that Australia manages end of life waste sustainably and efficiently.

Product stewardship: what is it and how is it regulated?

Product stewardship is a concept whereby manufacturers and other industry participants assume a level of responsibility for the collection and reuse of their products and components, saving those products from landfill.

In Australia, product stewardship at the Commonwealth level is regulated through the Recycling and Waste Reduction Act 2020 (Cth) (RWR Act). The RWR Act provides for three types of product stewardship arrangements: voluntary, co-regulatory and mandatory.

Voluntary product stewardship schemes

Voluntary product stewardship schemes are industry led and funded. Industry members can choose to sign up to the scheme, which is administered by a body corporate. Voluntary schemes currently exist for products such as mobile phones and tyres.

Co-regulatory product stewardship schemes

Co-regulatory product stewardship schemes may be designed by industry alone, or between government and industry. Importantly, however, the RWR Act and scheme rules mandate that all members of that industry must be part of the scheme – this can include manufacturers, importers, distributers and users of the product. The Australian Packaging Covenant, which aims to reduce the environmental impacts of product packaging, and the National TV and Computer Recycling Scheme are examples of co-regulatory schemes.

Mandatory schemes

The RWR Act gives the Minister for the Environment the power to make schemes that industry members are obliged to participate in. On the one hand, mandatory schemes may lack the benefit of industry input; on the other, they offer the Minister the ability to enforce change where industry is otherwise unwilling to act. There are no mandatory schemes currently in existence.

Industry commitment to combatting solar waste

Regulators must leverage and take comfort from the existing market-led demand for environmentally-friendly solar panel recycling both in Australia and globally, as well as the infrastructure being developed to facilitate it.

On the domestic front, Melbourne based co-operative Lotus Energy has recently finished construction on Australia’s first solar panel recycling centre in Thomastown. It will be followed by Reclaim PV Recycling’s facility in Lonsdale, South Australia. In September 2020, Melbourne-based company Elecsome received a 3 million dollar grant from the Federal Government to build its own recycling plant in partnership with RMIT and the University of Melbourne.

Internationally, leading Solar PV panel manufacturer First Solar has, for quite some time now, offered built-in recycling service agreements for its power plant and module owner customers. American manufacturer SunPower has certified its panel factory in Mexico as landfill-free since 2015. Further abroad, French-based multinational Veolia has recently opened a commercial-scale recycling plant dedicated to recycling solar panels which boasts a 95% recapture rate of raw materials.

The Commonwealth Government can use the above examples to strike the right balance between a regulatory scheme that achieves its environmental purposes and one that does not inflate costs to the point where utility scale renewable energy project development or installation of solar PV at a domestic or commercial level is stifled.

Where are we heading?

In 2016, the Commonwealth Government listed solar photovoltaic systems on the product stewardship ‘priority list’. The Clean Energy Council has put forward a proposal for an industry-led, self-funded voluntary product steward scheme. However, the Commonwealth Government considered the proposal to be unsatisfactory, and told the industry it will need to ‘step up’ its efforts. Minister Susan Ley has given the industry a deadline to agree on a finalised, nationwide scheme by June 2022, which must be operational by June 2023 and include an approach to deal with legacy solar panels.

Despite the initial setback, government and industry both remain committed to developing a solution. Either a voluntary or co-regulatory scheme therefore seems likely, though in our view, a co-regulatory model should be preferred, to avoid free riders failing to contribute to the cost of the scheme and undercutting those industry members who sign up.

The role of and opportunities for local government

While the Commonwealth Government is currently developing the framework for a product stewardship scheme, it is unlikely to become involved in the operational aspects of the scheme. Waste management is largely left to local governments, but their role has not been widely discussed.

To effectively implement a product stewardship scheme, there are both expectations and opportunities for local governments:

  • Local governments should encourage the establishment of solar PV recycling facilities. This might be through:
    1. including incentives in waste collections contracts for the collection of solar panel waste and delivery to recycling facilities;
    2. working collaboratively with other local governments to establish inter-jurisdictional waste catchments promoting economies of scale in solar waste collection; or
    3. encouraging the development of recycling facilities through planning controls and infrastructure incentives.
  • A national product stewardship scheme also offers opportunities for those local governments who incentivise the early establishment of recycling facilities. This may attract the recycling industry and waste streams, and, consequentially, further economic activity to those areas.
  • Local governments who operate their own materials-recovery facilities may be able to generate additional revenue through the recycling of solar panel waste.
  • Regional local governments should actively encourage the establishment of local recycling facilities. Regional areas often have a high uptake of both small and large scale solar, but may be more greatly affected by the cost of transporting expired panels unless local facilities are established. Commonwealth or State Government funding may be necessary to ensure regional residents and businesses are not unfairly disadvantaged.

What’s next?

Product stewardship for solar panels appears to be a matter of when, not if. Developing an effective system over the next 12 months will be vital to the solar industry’s future success.