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The Life Cycle Environmental Impacts of Solar Panels

Key Highlights:

  • Solar will likely become the most important source of energy for electricity generation in the future globally
  • Thermal fuels like coal emit 25 times more carbon emissions compared to solar throughout their lifetime
  • The upstream of the solar supply chain consumes considerable energy for the manufacturing of solar panels
  • Our estimations suggest that for 1 GW of solar power, the energy generated is almost twice as much as that used to produce the associated solar panels
  • Studies suggest the energy required to create a solar panel can be recouped in less than 2 years

Introduction

In 2020, solar photovoltaic (PV) generation increased by a record high of 23% from 156 TWh to 821 TWh, which was the second-largest absolute growth in power generation, just behind wind power, among all renewable technologies1. The International Energy Agency (IEA) anticipates global renewable capacity to expand by over 1,800 GW, accounting for almost 95% of the increase in total power capacity worldwide by 20262.

Solar is unarguably a clean, renewable energy source that has shown and will continue to play a key role in the decarbonization of the global energy mix. However, looking beyond solar just as an energy source, what are the environmental impacts and carbon emissions associated with solar panels' upstream and downstream supply chain? In this article, we review the life cycle environmental impacts of solar panels and whether energy generated from solar can offset the energy consumed to make solar panels.

Life Cycle Carbon Emissions: Solar vs Thermal Fuels

Many life cycle assessments have been performed to estimate the life cycle carbon emissions of solar power in comparison to other electricity fuel sources. The U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) screened approximately 3,000 of these studies and harmonized the data to compare emissions profiles for different electricity fuel sources3.

The life cycle carbon emissions intensity of solar PV is approximately 40 gC02/kWh whereas that for coal is approximately 1,000 gC02/kWh; to produce the same amount of energy, coal emits 25 times more carbon emissions for energy generation.

For solar, the majority (60-70%) of its carbon emissions occur in its upstream, with approximately 25% during operations and 5-20% after its useful life. On the other hand, coal generates almost all of its carbon emissions during operation from mining, transportation, combustion etc. and only 1% during upstream and downstream processes.

Upstream: Materials and Manufacturing

Solar panels require significant amounts of energy upfront to process materials and manufacture solar panel components. Solar panels’ predominant raw material Quarts are processed (under very high heat) into silicon and manufactured with other materials like aluminium and copper to produce a single solar module. If traditional thermal fuels, such as coal and gas, are used to power manufacturing facilities on-site, the associated carbon emissions can be significant. For example, Xinyi Solar uses natural gas as its primary production fuel for solar glass production but has recently started to install and use self-generated solar PV power on-site4. A company’s carbon footprint from indirect purchased electricity consumption will ultimately depend on the local energy mix at operating locations.

Although power generation in China is still primarily reliant on coal, we see Chinese solar panel companies relocate their operations to provinces with a higher share of low carbon energy. For example, LONGI relocated some of its operations to provinces such as Sichuan where hydropower has a larger share of its energy mix, therefore lowering its carbon footprint from electricity consumption.

In addition to the substantial energy demand upfront, toxic chemicals such as sodium hydroxide and hydrofluoric acid are also used to fabricate solar panels. There have been some controversies recently about the irresponsible disposal of toxic chemicals from solar panel companies. For example, solar panel manufacturer Jinko Solar faced protests and legal actions due to accusations of dumping toxic waste into a nearby river in Zhejiang5.

Transportation could also have a share in solar panels’ upstream carbon emissions. Suppliers for solar panel materials and components are primarily located within China, so the carbon emissions attributed to the transportation of materials may not be as significant. However, around 20% of solar panels produced in China are exported internationally such as to the EU6. In that case, the carbon emissions attributed to exports could be significant.

Operations

The useful life of a solar panel is at least 15-20 years, some going up to 30 years7. The energy efficiency of solar panels depends on geographic location, as solar as a natural resource is subject to the level of solar radiation and weather patterns: for example, a solar panel installed in the Sahar Desert will produce more energy compared to one installed in the arctic circle.

Nonetheless, technological advancements have significantly improved the energy efficiency of solar panels over time: early solar cells had an efficiency of just 1% whereas today’s solar panels are 20% and above8,9. This jump in energy efficiency meant a standard size solar panel could generate up to approximately 370W of power. For the first time in 2022, the efficiency of the top 6 solar panels is above 20%, including those from SunPower, Canadian Solar, LG, Panasonic and Jinko Solar10.

Cell design is a main contributing factor to improving efficiency; the latest developments in passivation contact technology for high-efficiency cells like TOPCon and heterojunction (HJT) have theoretical efficiency limits of 24-28%11. The potential for further efficiency improvements could further enlarge the gap in life cycle emissions intensity between solar and thermal fossil fuels, making solar even better positioned as a clean energy source.

Downstream: Decommissioning and Recycling

The International Renewable Energy Agency (IRENA) estimated the raw materials that can be recovered from solar panels at their end-of-life could be worth $450 million by 2030 and exceed $15 billion by 2050, equivalent to the cost of raw materials to produce 60 million new solar panels12.

However, as of currently, solar panels are disposed of like other standard electronic waste. Recycling of solar panels is not currently commonly observed in the market. Reasons include: firstly, there are not enough defunct solar panels to make recycling economical or scalable; secondly, raw materials for solar panels such as silicon are abundant and hence do not face shortage issues thus no strong demand for recycling of raw materials.

Nonetheless, globally, there are some examples of large-scale solar panel recycling plants such as one in France (first in the EU) that commenced operations in 2018. In its first year of operations, the plant recycled 1,300 tonnes of solar panels which is roughly all solar panels that will reach their end of life in France that year13.

Conclusion

Not only does solar power emit fewer carbon emissions over its lifetime compared to thermal fuels, but the net environmental impact of solar panels is also positive even after considering the substantial upfront energy consumed upstream of their supply chains. Our estimation suggests that for 1 GW of solar power, the energy generated is almost twice as much that required to produce a solar panel14. Studies suggest the energy required to create a solar panel can be recouped in less than 2 years15.

Having said that, wastage from the disposal of solar panels at end of life may pose adverse environmental impacts and is an issue faced by the sector that has not become prevalent yet. Currently, there are not enough solar panels at end of life to make the case for recycling economical. As more solar panels globally reach the end of life and the environmental impacts of solar panel waste become even more widespread, there will be a predominant need for policymakers and market players to implement recycling measures for solar panels.

AUTHORED BY
Holly So, CFA
ESG Specialist

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1 IEA, November 2021

2 IEA, 2021

3 NREL, 2021

4 Xinyi Solar, June 2021

5 National Geographic, November 2014

6 UBS Research, April 2022

7 EnergySage, 2022

8 Lafayette College, 2014

9 Boston Solar, January 2020

10 Clean Energy Reviews, March 2022

11 LONGI, November 2021

12 United States Environmental Protection Agency, 2022

13 Reuters, June 2018

14 Our estimations for solar panel production only consider energy consumption for material manufacturing e.g. silicon metal, polysilicon, wafer, cell, module, solar glass and others

15 Kuby Renewable Energy, 2022


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