Recycling and Renewable Energy

Recycling and Renewable Energy

October 25, 2022 | By Jenna Goldman in New York

End-of-life management of renewable energy is both a looming challenge and a potential opportunity.

Developers bidding to supply electricity or storage, manufacturers planning new factories, recycling companies and banks and tax equity investors financing projects should anticipate that there will be changes in law and new regulations to address the challenge.

The International Renewable Energy Agency projects that 78 million metric tons of solar panel waste could accumulate by 2050. The possible recovery of that waste could be worth as much as $15 billion.

The average useful life of a solar PV module is approximately 30 years. A lithium-ion car battery can last as long as 10 to 20 years. Wind turbines have a lifespan of between 20 and 25 years. Although these timelines are an eternity compared to the breakneck speed of development (70% of all active solar energy systems have been deployed within the last five years), putting recycling practices and policies in place now will avert a massive solid waste crisis in the future.

Governments are signaling that one approach to dealing with the future solid waste crisis is to place the responsibility and cost of recycling on manufacturers.

In parallel, new renewable energy technologies will require a significant amount of raw materials. These vital minerals are becoming increasingly difficult to find both because they are finite in quantity and because of recent restrictions on imports from countries without free trade agreements with the US. The minerals used in lithium-ion battery storage, such as cobalt, lithium, manganese and nickel, are non-renewable resources and are procured through carbon-intensive mining, which can be fraught with human rights abuse. The Inflation Reduction Act imposes rigorous sourcing requirements for such minerals in order for manufacturers to be eligible for tax credits.

Developers and sponsors should plan for recycling as they adapt to the growing number of regulations surrounding the recycling and reuse of these assets. In some states and countries, sponsors and developers will be compelled to contemplate the future of the equipment from the onset.

Three recent US statutes have recycling provisions that touch on renewable energy technology manufacturing.

The latest trends in the US and the European Union with respect to compulsory recycling programs also shed light on what manufacturers and developers should anticipate for end-of-life management and resource recovery.


The largest and most recently enacted of the three new US statutes is the Inflation Reduction Act, signed into law in August 2022. One of the main focuses of the IRA is to encourage domestic manufacturing and deployment of renewable energy technology, along with many other incentives for individuals and industries to reduce greenhouse gas emissions through the transition to renewables. Such massive leaps will be achieved through a variety of tax incentives.

The IRA includes several provisions that specifically address and encourage the recycling of components.

First, section 48C of the US tax code, as amended by the IRA, now earmarks $10 billion in available tax credits for manufacturers who invest in new or upgraded factories that build specified renewable energy technology and components. The definition of “qualifying advanced energy projects” eligible for tax credits has been expanded from facilities that manufacture certain components to include facilities that also recycle qualifying property. Recycling facilities now qualify for tax credits of 30% of the total investment in new or upgraded factories. This is a subtle yet significant change by Congress to put recycling on an equal footing with manufacturing of renewable energy components in the US.

Demand for minerals used in batteries and photovoltaic solar modules will increase as manufacturers ramp up renewable energy equipment production to take advantage of tax credits under the IRA. Suppliers of those necessary minerals, called “applicable critical minerals” and defined more specifically under new section 45X(c)(6) of the US tax code, will now need to comply with certain stringent requirements in order to be eligible for incentives.

Suppliers qualify potentially for a tax credit for 10% of their costs to produce the minerals. The minerals must meet listed purification minimums. They must be produced in the United States or US possessions.

The IRA also has sourcing rules for critical minerals used in electric vehicle batteries for purchasers to claim federal tax credits on such vehicles. The critical minerals must be extracted or processed in a country with which the United States has a free trade agreement or have been recycled in North America. Many minerals used in renewable energy technology are found only in certain countries. Not all of these countries have free trade agreements with the United States or sterling human rights records. This will make procurement of minerals through recycling and reclamation important.

This country of origin condition nods to the seriousness with which Congress and President Biden take international labor concerns. The renewable energy industry was rocked by the ban on importing essential solar panel materials from Xinjiang province in western China over reported forced labor of Uyghurs. Despite major supply-chain challenges that resulted from the ban on these Chinese solar panels, the US held firm on its stance.


The Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Fund Act, also signed into law in August, includes a $280 billion package of grants and tax credits, with $52 billion set aside for domestic semiconductor manufacturing. Companies that build semiconductor manufacturing plants in the US may be eligible for tax credits of 25% of the invested amount for the taxable year. (For more detail, see “Tax Credits for Semiconductor Manufacturing” in the August 2022 NewsWire.)

While semiconductors are most known for their use in computer chips, they are also crucial parts of photovoltaic cells and electric vehicles , and in efficiently transferring electricity generated by wind turbines and hydropower into the electricity grid. Most semiconductors are manufactured in China and Taiwan. Trade disputes and supply chain issues have underscored the importance of domestic manufacturing.

Domestic manufacturing is front and center in the CHIPS Act. However, Congress acknowledged the difficulty of finding raw materials needed to make semiconductors and is requiring recycling programs as conditions to certain grants by the Department of Energy.

The CHIPS Act authorizes grants for recycling programs helium. Helium is one vital element in semiconductors of which the US is a major supplier, but many other elemental or mineral components used in renewable energy technology are mined elsewhere around the globe, introducing another layer of complication to US manufacturing, one that has a possible remedy in reclamation of minerals in decommissioned components. Using helium as an example, the procurement of helium may soon become significantly more difficult, forcing more recovery and recycling. Helium is used not only to make semiconductors, but also in a range of other applications from medical imaging to space exploration to the classic birthday balloon. It is a non-renewable resource that is recovered through intensive drilling into underground gas fields.

So important is helium to modern society that the US created a federal helium reserve system in the 1960’s to store helium and ensure that enough will be available for national security purposes. Portions of the reserve are sold each year, and the reserve reportedly contains only enough helium to last until 2025.

In anticipation of potential helium supply shortages, the CHIPS Act directs the Department of Energy to establish a program to reduce the consumption of helium and to encourage helium capture, reuse and recycling. The department will also be required to publish reports on the quantity of helium purchased for projects receiving grants and to provide information on country of origin if helium was imported from outside the United States.

Unlike helium, most other critical materials required to make semiconductors and other components of renewable energy technology are not mined currently in the United States. For example, lithium-ion batteries used in electric vehicles require a significant amount of cobalt. Nearly 70% of the world’s supply of cobalt is recovered through nickel mining in the Democratic Republic of the Congo, a nation often cited for human rights abuses in its mining practices. Customs seizures of certain materials due to the human rights records of the countries of origin are a risk.

The CHIPS Act earmarks funds for critical-minerals-mining research and development in the form of grants to universities and non-profits to support innovation that will improve “recycling techniques and technologies that will decrease the energy intensity, waste, potential environmental impact, and costs of those activities.”

Bipartisan Infrastructure Law

The Infrastructure Investment and Jobs Act, signed into law in November 2021, covers a wide array of industry development and funding of projects ranging from highway safety to rural broadband access to the updating of potable and wastewater infrastructure.

Notably, the Act sets aside $335 million for the US Department of Energy to implement a lithium-ion battery recycling program. This is an indication that the federal government is serious about getting ahead of the future wave of battery waste.

The Act defines the term “recycling” as the “recovery of materials made from advanced batteries to be reused in similar applications, including extracting, processing, and recoating of battery materials and components.”

The new battery material processing grant program will award money to eligible entities for the purpose of expanding battery manufacturing in the United States. Grants will be made to entities that carry out demonstration projects to process battery materials, build new commercial-scale battery material processing facilities, or retrofit and expand existing battery material processing facilities, if located within the US and determined qualified by the DOE. Grants of up to $50 million will be awarded for projects that process battery materials or expand, retrofit or retool existing factories. Up to $100 million may be granted for the construction of new commercial-scale facilities.

The Act authorized a parallel grant program to be run for another office in DOE to encourage manufacturing and recycling of components for advanced battery manufacturing. Grants of up to $50 million may be made for demonstration projects and for updating and retrofitting existing facilities, and up to $100 million for building new commercial-scale manufacturing or recycling facilities. Priority will be given to entities operating in the United States using North American intellectual property and content and to battery recycling projects that it will not export recovered materials to a foreign entity of concern.

The Act also directs the US Environmental Protection Agency to award multiyear grants to entities for research, development and demonstration projects for approaches to increase the reuse and recycling of batteries.

The distinction between the DOE and EPA programs is that EPA will focus on recovering critical minerals from the standpoint of mitigating health and environmental impacts of battery recycling and disposal. Entities eligible for grants under this program are universities, federal and state research agencies, nonprofits, private battery producers, retailers and collectors.

Finally, the Act also encourages recycling of electric vehicle batteries. Two federal agencies — Commerce and DOE — will establish a grant program to improve recycling rates and second-use adoption rates of electric vehicle batteries, to refine of the design of EV batteries to make them more easily recyclable, to establish alternative supply chains for critical materials found in EV batteries, to reduce the cost of manufacturing of batteries, and to mitigate the environmental impact of battery recycling processes. Grants for this program will be awarded based on a competitive, merit-reviewed basis to eligible entities, prioritizing projects located in geographically diverse regions of the US and projects that have the potential for high-volume recycling capabilities, among other metrics.

European Union

While the US is using a carrot to encourage recycling of renewable energy technology components, Europe is using a stick”.

The European Union parliament recently adopted a report that lays out a blueprint for more stringent recycling guidelines, specifically for batteries. As of 2019, 51% of portable batteries in the EU have been collected for recycling, but the latest report calls for a more aggressive 70% recycling rate by 2025 and 80% by 2030.

Not only will the EU mandate the recycling of old batteries, but it will also require new batteries to be produced with a minimum of 85% recycled lead, 20% recycled cobalt, 10% recycled lithium and 12% recycled nickel by 2035. Batteries sold into the EU will be required to carry a “battery passport” that must include information about the battery’s carbon footprint, recycled content and an overview of any human rights abuses and safeguards in place across the supply chain of the individual battery.

US automobile manufacturers should take note of these stringent requirements and begin considering how best to comply if they wish to continue participating in one of the world’s largest markets for electric vehicles. Certain US states are taking notice of the trends in Europe and are implementing similar recycling programs, most prominently in Washington, Illinois and California.

Washington State

Washington State requires solar panel manufacturers selling panels after July 1, 2017 for use in the state to take back used panels for recycling. The requirement is in S.B. 5939 enacted in 2017. Implementation is expected to begin on July 1, 2025. Manufacturers will be required to provide for recycling of modules at no cost to the last owner or holder of the panels.

Solar panels covered by the program are all those installed on or connected to buildings, any freestanding off-grid power generation systems, such as EV charging stations or solar-powered street lights, module kits and modules connected to a grid or a utility.

“Manufacturer” is defined broadly under this law and includes seven types of entities. One is an entity with legal ownership of the brand name of the module for sale in or into Washington. Another is an entity that assembles a module using parts manufactured by others for sale in Washington under the assembler’s brand name. Another is an entity that resells or has resold modules into Washington under its own brand name. The term includes entities that have manufactured a co-branded module for sale in the state that carries the brand name of both the manufacturer and retailer. The fifth category is an entity that imports or has imported a module into Washington for sale. Category six is an entity that imports the module if the manufacturer does not have a physical presence in the US. Category seven is an entity that sells the module at retail and takes legal responsibility in place of an importer or manufacturer.

Manufacturers who sell modules in the state must submit a stewardship plan within 30 days of first sale of a module in Washington. The plan must describe how manufacturers will cover the costs to take back and recycle and describe how the program will maximize the recovery of mined minerals and other valuable materials while minimizing the environmental impact of the recycling process.

The state must approve the plan and manufacturers must provide annual updates on April 1 each year. Panels without an approved recycling plan have been blocked from sale in Washington since January 2021.

While Washington remains the only state to mandate recycling programs for renewable energy components, other states are beginning to plan for end-of-life management.


Illinois has a goal of transitioning to 100 % clean energy by 2050. As part of that effort, the state enacted Public Act 102-1025, dubbed the “Renewable Energy Component Recycling Task Force Act,” effective May 27, 2022. The Act establishes a REC recycling task force with instructions to investigate a number the future waste challenges.

It will explore options for recycling as a means of end-of-life management for renewable energy generation components and energy storage devices and consider the economic and environmental costs and benefits associated with each method of recycling. It will assess the expected impact on landfill capacity. It will survey other states’ and countries’ recycling requirements, including financial assurance requirements for owners, operators, developers and manufacturers. It will identify the new infrastructure necessary. It will make recommendations for end-of-life management for renewable energy components.

The task force must publish a formal report by July 1, 2025.


California was an early adopter of incentives for both rooftop and utility-scale solar. California formed a solar initiative in 2006 that granted $3.3 billion in subsidies for the solar industry. Today, between PV solar and solar thermal power, 17.31% of the in-state power generation comes from the sun.

In anticipation of the end of life of those early panels, California adopted new rules loosening its regulations around recycling of solar panels. Panels were classified as hazardous waste and were subject to strict disposal requirements, making the transportation, storage and handling of decommissioned panels difficult. However, the state shifted on January 1, 2021 to treating panels as “universal waste,” with the result that handlers will not be subject to storage limits and will be allowed to freely handle the waste (crush, compact, separate and saw). Handlers and owners will still be subject to certain notification and handling requirements, but the reclassification of panels should dramatically reduce the cost of recycling and open doors to innovative recycling opportunities.       

Local governments in California are not waiting for the state to adopt formal recycling plans. The City of Santa Monica launched its own successful solar panel recycling pilot program in 2022. With funding from the city, members of the California Conservation Corps went door-to-door collecting old or broken panels and dropped them off at a local electronic recycling facility equipped to process rooftop-sized panels.