Meet the company trying to create a circular economy for solar panels

Much has been made about the need to install solar panels, as the industry has grown at an average annual rate of 33% over the last decade.

But what happens at the other end of that process—when solar panels are ready to be discarded?

No standardized system for recycling panels—or tracking the process—currently exists in the US, per the LA Times, but research suggests only around 10% are recycled at present in the US.

Enter: Solarcycle, a startup launched in 2022 to tackle that exact issue. The B2B-oriented company wants to build out its first facility by Q4, which it says will be capable of handling thousands of solar panels per year, and in June it announced a $6.6 million seed round. So far, it’s partnered with Sunrun, a major residential solar installer, and it aims to make the process of recycling solar panels less expensive than landfilling them.

• By 2030, the solar-panel recycling market could reach $2.7 billion, per a recent report from Rystad, an eye-popping jump from the current $170 million valuation.

As part of our ongoing Twitter Spaces series on climate tech, we sat down with Suvi Sharma, Solarcycle’s co-founder and CEO. Keep reading for highlights, or click the Tweet below to hear the full conversation.

On the need for solar solutions

Though solar installation is still in its relative infancy, Sharma said we’re at the beginning of the “first wave of end-of-life solar,” as panels installed during the early 2000s begin to reach the end of their utility. So Sharma, who has ~20 years of experience in the solar manufacturing world, partnered with other industry veterans to establish Solarcycle.

They want to meet this wave of demand—and the potentially bigger ones to come—by extracting valuable materials from panels, many of which contain silver, copper, aluminum, silicon, and glass.

Sharma said that companies don’t always know what to do with their ”bulky,” out-of-use solar panels, and there isn’t much existing infrastructure for responsibly off-loading them. Panels can contain toxic materials like selenium, cadmium, and lead, meaning improper disposal can pose health and environmental risks.

“A lot of times the solar panels are literally sitting in warehouses or in fields,” he said, oftentimes because owners “don’t know what to do with them,” and “they don’t want to throw them away.”

The business model

Sharma said the process of recycling uses a variety of standardized operations like shredding panels, as well as newer, more specialized operations like extracting resources from laminates and triaging disassembled parts to drive down emissions and costs.

“One of the reasons why we’re able to raise funding for what we’re doing is that we are commercializing that technology to extract the core metals out,” he said. “It’s a very specialized process, specifically for solar panels.”

Solarcycle operates through both a direct and a channel model, sourcing material primarily from large asset owners (e.g., people who run solar farms) while also setting up a network of third-party drop-off locations for residential consumers.

• Sharma said in the next 12–18 months they aim to have 100 locations where panels can be collected through partners.
• The company plans to make money both by reselling materials extracted during the recycling process and by charging solar-panel owners a “take-back fee” to cover logistics and recycling expenses, Sharma said.

As the industry continues to increase in scale, Solarcycle set a three- to five-year goal of creating “essentially gigafactories” capable of processing millions of panels.

“We’re taking a phase-one approach, which is being able to process 300,000, 400,000 panels a year later this year in Q4, and then next year, being able to process 1 million –2 million a year, and then going in order of magnitude and five years from there.”

For context, Sharma said one million panels is roughly equivalent to a mid-sized solar power plant, “so what that means is we’re going to need…to 10x that pretty soon after.”

Looking ahead: Sharma wants SolarCycle to drive down recycling costs enough to make it the logical option even without external motivations like policy intervention. Right now, the The National Renewable Energy Laboratory estimated that a panel costs between $20 and $30 to recycle, in contrast with the $1–$2 it costs to send it to a landfill, but Sharma thinks that is due to change.

“Landfilling costs are only gonna go up, and so eventually, those will flip,” he said. “I do believe that recycling will become cheaper than landfilling.”