Energy
The Investment Case for Upgrading Older Solar Farms
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While solar energy is growing, it is also aging. The first solar farms and older solar panels are generally less productive than new ones due to the conjunction of two factors: the aging of the devices and improvements in solar and electrification technology in the years since older models were installed.
One part of dealing with this situation is the question of recycling, making sure that green energy does not become a new source of pollution, but instead a new resource for valuable materials like silver, purified silicon, copper, aluminum, glass, etc.
Another part is how to manage existing aging solar assets from earlier generations, especially the ones reaching the end of their typical 25–30-year design life. There are many options, from dismantling them to letting them slowly degrade in capability, or keeping the infrastructure but replacing the aging components.
A new study by researchers at the University of New South Wales (Australia) investigates the impact and economics of each option, as well as the real feasibility of upgrading older solar farms.
It found that the results of repowering old solar farms can vary greatly by region, and that available data are not always sufficient to provide a clear cost-benefit analysis.
They published their findings in Renewable and Sustainable Energy Reviews1, under the title “Decommissioning and repowering of utility-scale solar photovoltaic systems: A review of policy, economics, technology, environment and social dimensions”.
Dealing With Aging Solar Farms
An Increasingly Pressing Problem
Solar power is increasingly becoming the dominant technology in renewable energy, itself becoming a growing part of the global energy mix. This is largely because solar is a lot less constrained by site selection than wind, hydropower, or geothermal, facilitating large-scale deployment. And most of solar power deployment is being done in large projects:
“By 2025, total installed PV capacity rose to nearly 3 TW worldwide, with large-scale projects accounting for more than two-thirds of new capacity additions.”
So while discussion around recycling of the solar panels is useful, they missed part of the problem. A utility-scale solar farm comprises not only PV modules, but also inverters, mounting structures, kilometers of cabling, civil works, grid connection infrastructure, commercial frameworks, and land subject to regulatory and contractual obligations.
And for most operators that were there at the start of the solar boom, the issue is coming soon.
“The first wave of utility-scale solar projects, commissioned from around 2010 to 2015 in Europe, North America, and China, has entered its second decade of operation. For most asset owners, end-of-life (EoL) decisions remain a future obligation, but an increasingly near term one.”
Analyzing Solar Farms End-of-Life
In this study, the researchers gathered data from two sources: a review of academic literature on the decommissioning and repowering of utility-scale solar farms, and a set of documented case studies of interventions carried out at operating plants. They gathered 85 items comprising journal papers, conference proceedings, and industry and agency reports, selected based on their relevance, with most of them published in recent years.
Each case study was recorded by location, intervention category, installation and intervention year, capacity, scope, duration, reason and source type. The most studied country was the USA, followed by European nations.
The most analyzed topics in existing research were technical approaches, followed by economic assessment and social considerations. Environmental impacts and policy and regulation were also analyzed in some studies.
End-of-Life Options
When it reaches the end of its lifespan, a solar farm can be dealt with according to several options:
- Decommissioning, or the full dismantling of a solar farm, including removal of all components, waste management, and site rehabilitation.
- Repowering, or the replacement of major system components to increase nominal capacity.
- Revamping, or the replacement of system components to restore or improve performance without substantially changing nominal capacity.
- Refurbishment, or the smallest possible investment that addresses limited issues without fully restoring original capacity or performance.
It should be noted that in most studies, repowering is often grouped together with revamping, and many sources do not mention whether capacity changed or not.
By far, the USA is the country with the most documented cases of revamping and repowering projects, followed by Italy.
Many of these U.S. interventions were linked to environmental events such as bushfires, hail, and cyclone damage. For example, the 24 MW AES Ilumina PV plant in Puerto Rico replaced damaged modules following hurricane impacts, while a 4.4 MW Texas project reported revamping after hail damage to arrays.
Varying Regulations
When it comes to decommissioning, local and national regulations have a huge impact on how it is done. In the USA, the situation is usually a mix of local and state policies.
“32 states had established decommissioning policies, either as statewide mandates, statewide/local hybrids, or optional statewide policies, while 18 states and the District of Columbia leave the matter to local governments. One state provides a model template that local governments may adopt voluntarily. ”
In Australia, Solar developers must identify proposed decommissioning and rehabilitation activities as part of their development approvals, through project-specific conditions of consent rather than explicitly prescribed in legislation.
In the EU, solar PV waste is considered “electronic waste” and requires all producers supplying PV panels to the EU market to finance the collection and recycling of EoL modules.
In South Korea, PV manufacturers and module sales companies are responsible for recycling and waste collection.
In China, centralized PV power generation enterprises are legally accountable for the disposal of decommissioned equipment and are explicitly prohibited from disposing of such equipment through landfilling or dumping.
Processing Solar Farms
Decommissioning Economics
There does not seem to be a general case when it comes to the economics of decommissioning, at least from US-based studies. The decommissioning cost of a 50 MW solar farm can differ by over $13M, ranging from –$88,000/MW (owners could effectively make money from salvage) to +$177,000/MW, a significant liability.
While removing modules, racking, wiring, and footings can account for up to 90% of decommissioning costs, land restoration requirements can significantly increase total costs. Remote locations can also increase costs as a result of longer transportation distances and limited access to skilled labour.
“At the Ivanpah facility, for example, a 10-year ecological monitoring program cost over USD $9 million due to strict environmental protections.”
When these EoL costs are incorporated into the levelized cost of energy (LCOE), the total LCOE could increase by up to 2%.
Environmental Impact
Overall, the decommissioning of a solar farm can generate short-term environmental disturbances, including dust, noise, erosion, vegetation loss, soil compaction, wildlife disturbance, and contamination from fuels and broken modules. However, this can be solved with the appropriate mitigation and restoration methods.
“Dust suppression, foundation backfilling, salvaging and reapplying topsoil, re-establishing vegetation cover using appropriate species, monitoring revegetation progress, timing works to avoid breeding seasons, and implementing habitat restoration programs”
Other studies show that the construction of solar farms does not prevent the re-conversion of land to agriculture after decommissioning, and that solar infrastructure can deliver net ecological benefits over time when land is managed responsibly.
In any case, recycling is the superior option. Across analyses of crystalline silicon and CdTe (Cadmium Telluride) modules, recycling consistently shows lower net environmental impact than landfill because recovered materials offset these burdens. Landfilling, by contrast, provides no material recovery benefits, occupies land, and can contribute to human and terrestrial toxicity effects.
Lastly, carbon emissions of a solar farm can also be affected by the replacement of equipment. For example, a study found that carbon payback time rose from about 1 year with no replacement to 2.4 years with two replacements. The ultimate impact will also depend on the electricity that the new modules displace, with replacement of coal power plants especially positive.
The Repowering Alternative
Why Repowering An Old Solar Plant?
If decommissioning is a possibility, the aging solar farms also provide an option of upgrading the existing facility. This can reuse existing connections to the grid, built access roads, concrete foundations, existing solar panel racks, etc.
Unsurprisingly, repowering is most efficient when done in projects facing severe yield losses. For example, in an Italian case study, yield losses of over 50% due to degradation and tracker faults prompted a revamp that increased annual output by 136%, with an eight-year payback.
However, most studies fail to give realistic estimates of repowering economics, as they fail to incorporate dismantling, transport, recycling, or repowering approval costs.
Legal Factors
A major non-technical factor is whether a repowered solar PV project can be treated as newly placed in service for tax credit purposes. In the USA, the Internal Revenue Service 80/20 test applies, where the market value of retained equipment must not exceed 20% of the total value of the repowered facility, meaning that at least 80% of the facility’s value must be attributable to new equipment.
Another legal element likely to impact decisions about repowering is whether the landholder agreement clauses similarly contain repowering-specific provisions, which is rarely the case.
In the EU, repowering is encouraged by accelerated permitting frameworks: the permit granting procedure for repowering of renewable energy power plants is capped at six months, subject to limited extensions, compared with a maximum of 12 months outside these areas.
How To Make Repowering Work?
At the component level, a key factor in a successful repowering project is dealing with integration issues and regulatory constraints for each major component type.
Modules (“solar panel”) and inverters are the most frequently replaced components in repowering interventions, followed by tracking systems and cables, but their integration into existing systems presents compatibility challenges.
Meanwhile, corrosion rates, soil conditions, and structural margins impact the durability of racking and pile foundations and determine if they need refurbishing.
When repowering results in greater power generation capacity, it can require the interconnection agreement to be updated or renegotiated. This can come at a high cost.
As repowering is likely to increase the lifespan of a solar farm, the improved facility can exceed the term of its PPA (Power Purchase Agreement) or land lease, and both then need to be renegotiated, which can impact the economics of the operation.
Investors Takeaways
This study reveals that in some cases, an aging power plant can become an asset able to produce energy for several years or even decades longer through repowering.
However, this is not always a straightforward process. Tax rules, expiring lease agreements, and compatibility with existing equipment can cause multiple issues, blocking or making repowering projects too complex or too costly. New or updated permitting can also be an issue, especially in jurisdictions without a repowering legal framework.
The study authors recommend a set of measures that would help future repowering projects:
- Creating an integrated national end-of-life legal framework.
- Creating specific approval procedures for repowering projects.
- More standardized lifecycle assessments of end-of-life options
- Digital forecast tools to deploy on specific projects.
So while repowering can definitely improve a project’s profitability and improve its environmental profile, it should not automatically be assumed to do so.
Investors will instead need a clear understanding of the costs, regulatory constraints, and other legal hurdles (taxes, leases, etc.) and anticipate potential technical issues of compatibility between old and new equipment.
If the project plans to expand power beyond the original capacity, technical capacity and power purchase agreements regarding grid connections will also need to be considered.
Investing In Solar Energy
First Solar
FSLR Price Chart
Because aging solar power plants are either costly to dismantle or complex to repower, a focus on modern, long-lived designs for solar cells could become a long-term competitive advantage.
Currently, most of the world’s photovoltaic panels are produced in China, thanks to the country’s extensive ecosystem in the production of polysilicon and the manufacturing of solar cells.
However, other technologies besides silicon-based solar cells exist, and one of the rare survivors of the solar industry in the West, First Solar (FSLR ), is leading in this field, using cadmium telluride solar cells. They are both easier to produce (thin-film technology) and have a higher efficiency than silicon-based cells, albeit with higher costs for their raw materials.
This type of cell is also more durable, which can change the equation for both homeowners and utility companies when calculating the lifetime cost of a solar cell and its depreciation. This is especially true as the quick progress in solar cell yield and declining costs has been slowing down in the past few years.
Source: First Solar
As cadmium telluride cell production is a mostly automated manufacturing process, it is relatively less sensitive to differences in labor costs. This can make its production in Western countries a lot more competitive, especially when they are sold locally, and it removes shipping costs from the equation.
Instead of multiple factories, with each actor specialized in one segment like polysilicon purification, and with many days to produce a solar cell, First Solar can go from raw materials to finished product in less than 4 hours and fully integrate all the steps of its solar cell production vertically.
In the long run, First Solar expects to be able to fully recycle the cadmium telluride from old cells, and 90% of the total solar cells. The remaining 5-10% of the recycled module scrap consists primarily of glass fine particles, which are captured by dust control systems and High-Efficiency Particulate Air (HEPA) filtration systems.
This could reduce material costs, remove the ecological cost of resource extraction, and remove any risks of pollution.
“With every module sold, we also sold the service that we pick up the modules at the end of life and recycle them. That was basically 8 years before regulation came in in Europe. We now have the electronic waste directive where PV is part of that.”
Andreas Wade – Global Sustainability Director at First Solar Future Techs
Besides cadmium telluride, First Solar is also exploring even more advanced solar cell technology, like perovskite and cadmium telluride-perovskite hybrid cells, which could have higher efficiency and even more durability.
Overall, First Solar is a great stock for investors looking to invest in the solar energy boom with a focus on Western producers, instead of the more geopolitically sensitive Chinese producers.
(You can read more about First Solar in our investment report dedicated to the company and about solar energy in our report “The Solar Age – A Bright Future To Mankind”)
Latest First Solar (FSLR) Stock News and Developments
Study Referenced
1. Verity Tan, Rong Deng, and Renate Egan. Decommissioning and repowering of utility-scale solar photovoltaic systems: A review of policy, economics, technology, environment and social dimensions. Renewable and Sustainable Energy Reviews. January 2027. Article: 117609. Volume 245, Part A. 10.1016/j.rser.2026.117609
