Why Decommissioning Costs Must Be in Your PV & BESS Financial Model
This article summarizes key insights from the Sinovoltaics webinar, “The Hidden Bill – Why PV & BESS Decommissioning Must Be Part of Your Financial Model,” featuring expert commentary from Andreas Bach. To watch the full webinar replay, please click this link.
As solar and battery energy storage projects scale across the globe, developers and investors remain laser-focused on CAPEX, OPEX, and the elusive lowest Levelized Cost of Energy (LCOE). But there’s a line item that too often gets ignored - decommissioning. According to Sinovoltaics’ latest webinar, failing to account for PV and BESS decommissioning isn’t just an oversight, it’s a financial and regulatory liability waiting to happen.
The Solar Boom’s Invisible Cliff Edge
By 2028, Europe alone is projected to host over 671 GW of PV capacity, according to SolarPower Europe. That equates to more than 1 billion solar panels, all of which will need to be decommissioned and recycled, many sooner than anticipated.
But here’s the problem: few projects model end-of-life (EOL) costs or strategies. According to Andreas Bach, a seasoned utility-scale PV and BESS expert, “Project plans rarely include decommissioning. And when you bring it up in boardrooms, it’s often met with silence, like a deer in the headlights.”
What Makes Decommissioning So Critical?
1. It’s Not Just Recycling — It’s Costly Logistics
Decommissioning includes:
• Dismantling modules, batteries, and structures
• Handling hazardous materials
• Transporting components to recycling facilities
• Restoring land to its original condition
Typical decommissioning costs? Around €50,000 per MWp, with salvage values (e.g., recovered silver or aluminium) covering just €8,000–€12,000/MWp. That leaves a significant funding gap.
2. Regulation Is Already Here
In the EU, Extended Producer Responsibility (EPR) laws mandate proper recycling — landfilling is illegal, and export is only allowed for certified second-life use. Decommissioning is not optional; it’s a legal obligation.
3. Lenders and Investors Are Catching On
Omitting EOL costs from financial models may:
• Lead to higher financing costs
• Raise red flags during due diligence
• Reduce project valuation during asset sale
As Bach puts it, “Circularity is not just a sustainability checkbox, it’s capital protection.”
Why Panels Are Retired Early
Surprisingly, panels are often decommissioned before their 25-year lifespan. Why?
• Accelerated degradation: Modules often degrade faster than projected.
• Repowering potential: New panels offer 30–40% more energy output at the same footprint.
• End of feed-in tariffs: Many asset owners see economic benefits in upgrading.
All of this increases the volume of decommissioned panels — and the need for a viable recycling infrastructure.
The Case for Design with Decommissioning in Mind
Smart Engineering Reduces Future Headaches
Asset owners can significantly reduce decommissioning costs by making better design choices today:
• Avoid concrete-mounted racking: opt for rammed or screw piles where feasible.
• Use containerized stations instead of concrete — easier to dismantle.
• Implement QR-coded asset passports: These enable traceability and easier material sorting for future recycling.
• Standardize documentation and GIS mapping for all components.
In one case, switching from concrete footings to driven piles saved thousands of euros in expected dismantling costs for a 100 MW plant.
What About BESS? Even More Urgent
Battery energy storage systems (BESS) have much shorter lifecycles — around 8–12 years — meaning you’ll likely recycle them three times during the lifetime of a PV plant.
And unlike PV, BESS shares recycling streams with the booming EV industry, creating intense competition for capacity and further driving costs.
The Economics of PV Recycling
• Average recycling cost: €100–€200 per ton (median: €150)
• Recovered material value: ~€110/ton
• Gate fee: €40+ per ton just to recycle
The most valuable recovered material is silver, with about 1 gram per panel — not enough to make recycling profitable without gate fees or subsidies.
How to Future-Proof Your PV & BESS Projects
To avoid financial shocks and ESG liabilities 25 years down the line, project developers and investors should:
✅ Include decommissioning as a CAPEX line item
Don’t assume salvage value will offset recycling costs — the math rarely works.
✅ Secure long-term recycling partnerships
Recycling within 300–500 km is cost-effective; further than that, logistics kill the economics.
✅ Establish a decommissioning bond or reserve
Like a warranty bond, this ensures funds are available when needed.
✅ Ensure traceability and as-built documentation
From serial numbers to GIS location data — tracking makes dismantling and recycling smoother and cheaper.
✅ Incorporate EOL planning in EPC and O&M contracts
Build it into the supply chain from day one.
The Bottom Line: You Can’t Afford to Ignore the End
Decommissioning is no longer a “later” problem. With clear regulations, rising costs, and tighter financing conditions, the hidden bill at the end of a project’s life must be accounted for now — not after year 25.
Planning for PV and BESS decommissioning is not just a technical issue; it’s a strategic financial imperative.
Key Takeaways:
• €50,000/MWp is the expected decommissioning cost — often not offset by material recovery.
• EU regulations require certified recycling — landfilling is banned.
• BESS has a 3x faster recycling cycle than PV modules.
• Design and documentation choices today significantly reduce future costs.
• Decommissioning planning is increasingly tied to project bankability and ESG credibility.
What’s Next?
If you're a project owner, developer, or investor, now is the time to build decommissioning into your project lifecycle. At Sinovoltaics, we help clients design with longevity and sustainability in mind — from supplier audits to end-of-life strategies. Need help with decommissioning planning or lifecycle risk mitigation? Reach out to the Sinovoltaics team today.