Emerging Opportunities in Promoting Circular Economy in Solar PV Value Chain

Renewable energy holds significant potential in the context of energy security and decarbonisation of the Indian economy given its rich endowment of natural and renewable sources, such as solar, wind, biomass, small hydro, and the like due to its geographic location near the tropics. Further, given India’s commitment of 40 percent cumulative electric power installed capacity from non-fossil-fuel energy resources by 2030 as a part of its pledge to the Paris Agreement, it expects to have 450 GW (including 300 GW of solar) of power generation capacity from renewables by 2030.

Solar energy, in the form of large-scale solar photovoltaic (PV) deployment, is envisaged in a large way. However, there are challenges linked to the availability of raw material for domestic manufacturing of key components under this technology (such as solar cells/ modules) and the challenges related to the disposal and management of these components at the end of life.

For many of the raw materials required, India currently is import dependent. Additionally, in the absence of enough manufacturing capacities, partially related to and also complicated by expensive raw materials, there are potential threats of price volatility that could affect the deployment of renewable energy at further competitive prices in the future.

For example, India depends heavily on imports of silver, which is a core element in manufacturing solar panels, and copper which is used in solar PVs. Prices of pure metallurgical silicon, the most important raw material for solar cells and majorly supplied by China, has risen in recent months by as much as 35% due to multiple factors.

Further, many of the solar photovoltaic PVs will be reaching end of life given that the expected useful working life of solar PV modules is between 25 and 30 years, after which they have to be discarded. Parts damaged during transportation, installation, operation, or even natural calamities also become PV waste. Estimates by TERI have suggested that the current 31 GW solar capacity alone would result in 107,000 tons of solar PV waste by 2022.Of this, about 24,000 tons would result from damages during transportation and installation and the rest (about 82,000 tons) from early failures during the plant operation phase. This amount will continue to grow as more solar capacity is deployed in future. Further waste is expected from the conventional lead acid and more importantly recent lithium ion and lit

These challenges, however, have the potential to create unprecedented opportunities in securing domestic resources using resourceefficient and circular strategies focussed on a life cycle approach towards solar energy technology. Resource recovered from components of end-of-life of solar PVs and storage systems can be used again in the sector itself and even other sectors.

An approach like this can also contribute to employment generation, particularly in the recovery and recycling of used material from discarded/waste solar equipment, while promoting investment opportunities in technologies for material recovery and its recycling.

The Indian government has recognized the need to have a policy framework aimed at creating a diversified domestic manufacturing industry for solar equipment (including modules and its ancillary products) and at the same time also promoting end-of-life management for recovery and recycling of secondary raw materials.

For example, with an objective to safeguard domestic manufacturers and to boost the local upstream solar manufacturing sector, the Union Ministry of New and Renewable Energy (MNRE) has noted that solar cells used in panels will be deemed as domestically manufactured only if they are made in India with un-diffused silicon wafers or black wafers.

To qualify for benefits under a number of MNRE schemes such as Kisan Urja Suraksha Evam Utthan Mahaabhiyan manufacturers must demonstrate they have used domestically manufactured solar PV cells. Manufacturers who use imported semi-processed solar PV cells (blue wafers) in their units will not qualify under the scheme because too little local value-addition is involved. The government wants to boost upstream manufacturing where currently there are limited polysilicon, wafer, and cell production facilities to support domestic requirements.

This would also help with the government’s Make in India policy, which recognizes solar manufacturing as an industry having ‘strategic importance’.

Further, the Draft Battery Waste Management Rules, 2020 by MoEFCC cover all types of batteries regardless of their shape, volume, weight, material, and composition, or use, and have also emphasized on EPR and included in it is the responsibility of manufacturer, importer, assembler and re-conditioner to ensure that the used batteries are collected back against the new batteries that are sold.

Key elements of resource efficiency and circular economy strategy for solar PV technology

To be able to convert possible future environmental and resource security related challenges into opportunities, resource efficiency and circular economy strategy should be developed for the solar technologies that focus on certain key elements such as:

• Responsible product designs to decrease material consumption and enable end of life recovery of secondary raw material: Standardized and easily dismantled solar PV module designs that also enable use of secondary raw materials can be promoted by setting up of modest targets. Rebates and incentives on new installation of new PV modules using recycled raw materials can help in nudging behaviours. For example, silver consumption can be reduced by substituting it with nearly pure recycled silver. Reducing glass thickness by 45% through the use of anti-reflective coating can also significantly save materials and aluminium consumption. Use of aluminium as a framing material for solar PVs could also be reduced by introducing frameless modules.

• Promotion of proper solar panel recycling infrastructure: The Union Ministry of Information Technology (IT) is already piloting technologies for efficient recovery of materials from end of life solar PVs at Centre for Materials for Electronics Technology. Once these technologies work, they can be made available to businesses so that their existing facilities and reverse logistics network can help acquire discarded modules for dismantling and recovery of materials from PV modules.

• Sourcing back used components at end-of-life stage: Realistic and achievable PV panel collection targets for manufacturers and distributors as a part of Extended Producer (EPR) should be explored. Dealers’ network for buyback of end-of-life solar rooftop panels holds the key while for large-scale projects, developers and original equipment manufacturers need to come together. The cost of take-back arrangement needs to be specified within the total cost of installation. Further, the business models could have the financial viability based on a producer-financed compliance fee or consumer-financed end-of-life fee. Enforcement mechanism for such contracts should be designed by the government in their tenders/schemes or PPA agreements.

• Capacity building and awareness generation for managing end-of-life waste: Guidelines should be issued that specifically provide a methodology for safe disposal and management of the solar cells or modules, for which there should be organized skill and training programs. Labelling and standards that could be adopted for recycled/secondary products also need to be defined. These activities can be undertaken close to where PV manufacturing takes place, thus facilitating the creation of a suitable ecosystem. Awareness generation through showcasing innovation and good practices and exploring potential for up scaling of the new technologies for end-of-life solar PV needs to be undertaken hand-in-hand with other initiatives.

• Strengthen research and development: India needs to invest quickly in new research including that focussed on developing new technology for manufacturing solar cells from alternative materials and with improved efficiency.

• Integrating EPR into the end-of-life management framework: This is a key approach to promoting circularity in the sector. The European Union’s (EU) Waste Electrical and Electronic Equipment (WEEE) directives impose recycling requirements on solar panel manufacturers and mandate the fabrication of new panels using recycled components. The Indian E-Waste Rules of 2016 currently does not include solar PV panels, implying that it still continues to be handled in an informal and inefficient manner.

While the solar sector continues to grow robustly, the time is appropriate to promote integrated thinking that will help in using the 6R principles along the production consumption chain. By the time India achieves a leading position in solar based electricity in the coming years, presence of established scalable material recovery technologies, effective reverse logistics backed by supportive policies and finances will definitely ensure a resource efficient, self-reliant renewable energy sector India.

- Dr. Shilpi Kapur Bakshi Senior Fellow, TERI

- Souvik Bhattacharjya, Associate Director, Integrated Policy Analysis Division, TERI