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Unless the land is valuable, you might as well leave old solar farms there. Even when they're 50 years old they'll still output some power, even if half the i

Unless the land is valuable, you might as well leave old solar farms there. Even when they're 50 years old they'll still output some power, even if half the inverters are dead and the panels are down to 50% efficiency.

hef19898 3y ago
But why woupd you do that? The whole investment case was calculated on the 20 year life time of the panels. So it is more profitable to just re-power the plant, and generate a lot more electricity, and money, from the same surface. Rinse and repeat.
- maxerickson 3y ago
  Well, if it's worth putting new panels on it, then the land must be valuable. Illustrates the banality of the GP comment.
  - hef19898 3y ago
    What has the land to do woth power plant on it? Value wise I mean.
    - the8472 3y ago
      I think the argument is that if land value were ~zero you could put the new panels next to the old ones that are still producing power.
      - hef19898 3y ago
        That's not how those projects are financed so. The initial investment is calcupated based on, usually, 20 years, after which the performance guarantee of the big panel producers, and only those are used for big projects, run out. After that, the business case resets. So, in your example, the investors would repower the existing plant, anf xash whatever they get for the old gear on the second market, and build a new obe next to it. Not to forget, costs per kWp go doen year after year. At the sake time Wp per panel go up year after year as well. This alone makes repowering much more attractive than just letting old plant running.
        konschubert 3y ago
        If you have a fully written if asset that is still producing amazing returns, that may be better cash flow wise than taking on a new loan.
        hef19898 3y ago
        In theory, but not all written off, old assets are a good idea. Especially if the new one generates a lot more revenue than the old one. Just one thing, depreciation is all about cost accounting and has exactly zero to do with cash flow.
        konschubert 3y ago
        My point is, if the discounted cash flow from (new panels - loan repayment)is smaller than the discounted cash flow of keeping the old panels, over a sufficiently large future period, then it’s better to keep the old panels.
        hef19898 3y ago
        Those plant, utility scale I mean, are not paying loans, those are using special project investment vehicles. Discounted cashflow is not used in these cases (I know it as a way to determine the valuation of a company), things like ROI are used for utility scale projects. And guess why the vast majority is repowered with new panels...
        konschubert 3y ago
        I feel like the of action that makes the most economic sense should be invariant of the exact financing vehicle. (Loan or investment fund).
        hef19898 3y ago
        Feelings are completely irrelevant when it comes to investments in the tens to hundreds of millions. Those things are extremely well defined and unserstood, that's why people in accounting, finance and business development are crucial and have rather high paying jobs. The back of napkin maths I do for household level purchases and investments do not scale to those levels. Nor do they to company level finances. Following those practices are, obviously, no guarantee for success. Not following them on the other hand is a near guarantee for failure.
    - maxerickson 3y ago
      It's the other way around, the suitability for a power plant makes the land valuable (and that value driver is relatively unlikely to go down over the lifetime of the plant, for the reasons that lots of people have already commented on). The reason I said the other comment was banal is because it amounts to "do what makes sense", which well, yeah.
KolmogorovComp 3y ago
An old solar farm is invaluable, because it means you have already got all the administrative authorisations to operate (that can take years in Europe), and also already connected to the grid, with the infrastructure around to maintain the farm (clean/fix panels, security, etc.).
- TylerE 3y ago
  Isn’t that an even stronger argument for upgrading an existing plant in situ versus spinning a new one up?
  - tomek_ycomb 3y ago
    I think it's an argument for adding just the number you need to compensate for the power loses Otoh I think people are forgetting there's a point where the maintenance gets to be more
    - dorfsmay 3y ago
      Given that over 40 years they changed everything but the panels themselves, what maintenance?
      - TylerE 3y ago
        Presumably "infrastructure around to maintain the farm" has some costs. Land. Property tax. inspections. That sort of thing...
    - konschubert 3y ago
      Old plants were often designed such that at peak production, they would saturate the grid connection. If you re-power that plant with more efficient panels, your production will sometimes be capped by the grid connection. But it’s fine because you will have significantly higher production in the morning and evening hours. This can make financial sense. I hope they put the used panels on the second hand market, such that users with different economics ( home installs, countries with lower labour and land costs) can buy and use them.
deleted 3y ago
[deleted]
jillesvangurp 3y ago
That's a big if. If you own the land, and have it connected to the grid, it at least has some value. The question then becomes what the value of the revenue is that you are going to gain replacing the panels. That's a simple economic question, it's probably not going to be nothing.
- bombcar 3y ago
  If the grid connectivity issue is cheap enough and easy enough, it’s much easier to build new ones than knock down and old one and then build a new one. Similar thing to houses, where there is available land to build new ones.
cesarb 3y ago
The most valuable part is not the land itself, it's the grid connection. That is, the towers bringing the power to a nearby substation, the bay in the substation with the circuit breakers and measuring equipment (adding new bays to existing substations is expensive and requires expanding their size), and the budgeting for the amount of instantaneous power the solar farm can generate. Transformers in substations have a limit to how much power they can convert, and the other circuits leaving the substation (and recursively, all these things in the substations they connect to) have a limit to how much power they can carry. Here in Brazil, we have already gotten to the point where the bottleneck to adding new grid-scale solar and wind is often not the land or the panels/turbines, but the amount of power the grid can carry, especially between the Northeast (which has lots of wind potential and plenty of solar potential) and the Southeast/South (where the power consumption is the highest). A miscalculation in this amount (the solar and wind power plants did not react as specified to a power disturbance, so the calculations were too optimistic) was a major factor in the recent country-wide blackout (https://en.wikipedia.org/wiki/2023_Brazil_blackout https://en.wikipedia.org/wiki/2023_Brazil_blackout but that article seems to be missing the later updates from https://www.ons.org.br/Paginas/Noticias/Ocorr%c3%aancia-no-SIN-em-15-de-agosto-de-2023.aspx https://www.ons.org.br/Paginas/Noticias/Ocorr%c3%aancia-no-S...).
- KennyBlanken 3y ago
  > The most valuable part is not the land itself ...What? > Here in Brazil Ah. When your country is destroying 8,000 square km/year in Amazon rain forest (and disappearing the indigenous people who live on it), yeah, I guess you would think land is 'cheap.' Anyway - you're missing the point. The "cost" is lost opportunity. At a certain point, between increased new panel efficiencies and the currently installed panels losing efficiency, the operator is missing out on enough power generation that they can upgrade and make more money in the long run.
- gwern 3y ago
  I'm not really following your point. If the land/space is not the bottleneck but the grid, then that makes the idea of leaving old panels in place all the better. As the electrical output falls by the aging panels and underutilizes your grid connection, you could just top them up with new panels, up to the limit of your grid connection (putting them in the spare land you have by stipulation). The question would seem to be, at what point is the marginal profit from the trickle of electricity from fully-depreciated old panels less than the cost of ripping them out & selling the scrap? Presumably there is such a point, as the old solar panels increasingly approach zero electrical output, if their materials aren't so worthless as to not even be worth the cost of scrapping.
benj111 3y ago
In a situation where a land owner has more land than solar, and the land is already hooked up to the grid, and permissions etc are relatively cheap, and the limiting factor is the cash to install new panels, then yes, it makes sense to build a second new farm rather than replace the old. Most situations aren't like that though. If you have limited land, it makes sense to make it more productive, if you need to spend significant amounts to set up a new farm over and above the raw panels, it makes sense to reuse what you already have.
infecto 3y ago
I think this mostly plays out for residential or other consumer level generation setups. It is doubtful this makes sense at the commercial level and recyling/reusing does make sense.
GaggiX 3y ago
Well, if they change them, we can buy used solar panels for dirt cheap. Many already do.
ahartmetz 3y ago
I initially thought the same, but then I did the maths (sloppily). Reasons for repowering would be that newer modules are more efficient for reasons other than age (in the case of the Swiss array, new modules would be over twice as efficient) and that the modules are a fraction of the cost of the array - modules are very cheap now. In a very naive calculation, a module pays for itself in less than a year https://ourworldindata.org/grapher/solar-pv-prices https://ourworldindata.org/grapher/solar-pv-prices (assumptions: $0.26 / kWh, more than 1000 full-power hours in a year). A new module (again naively, without installation or capital costs) replacing a 20% degraded one would then pay for itself in about five years. So, I guess we are now in a situation where solar modules are almost free - there are now other problems to be solved and they seem difficult, storage especially...
- mercutio2 3y ago
  You’re off by an order of magnitude in the value of wholesale electricity. Wholesale rates for non-dispatchable electricity are under $.02 / kWh.
- iforgotpassword 3y ago
  I think this is what gp meant by "unless land is valuable"... Just build the new array next to it otherwise. :)
  - konschubert 3y ago
    The cost is in the mounting and the inverters. If you can re-use them, it might make sense re-power.

hef19898 3y ago

But why woupd you do that? The whole investment case was calculated on the 20 year life time of the panels. So it is more profitable to just re-power the plant, and generate a lot more electricity, and money, from the same surface. Rinse and repeat.

maxerickson 3y ago
Well, if it's worth putting new panels on it, then the land must be valuable. Illustrates the banality of the GP comment.
- hef19898 3y ago
  What has the land to do woth power plant on it? Value wise I mean.
  - the8472 3y ago
    I think the argument is that if land value were ~zero you could put the new panels next to the old ones that are still producing power.
    - hef19898 3y ago
      That's not how those projects are financed so. The initial investment is calcupated based on, usually, 20 years, after which the performance guarantee of the big panel producers, and only those are used for big projects, run out. After that, the business case resets. So, in your example, the investors would repower the existing plant, anf xash whatever they get for the old gear on the second market, and build a new obe next to it. Not to forget, costs per kWp go doen year after year. At the sake time Wp per panel go up year after year as well. This alone makes repowering much more attractive than just letting old plant running.
      - konschubert 3y ago
        If you have a fully written if asset that is still producing amazing returns, that may be better cash flow wise than taking on a new loan.
        hef19898 3y ago
        In theory, but not all written off, old assets are a good idea. Especially if the new one generates a lot more revenue than the old one. Just one thing, depreciation is all about cost accounting and has exactly zero to do with cash flow.
        konschubert 3y ago
        My point is, if the discounted cash flow from (new panels - loan repayment)is smaller than the discounted cash flow of keeping the old panels, over a sufficiently large future period, then it’s better to keep the old panels.
        hef19898 3y ago
        Those plant, utility scale I mean, are not paying loans, those are using special project investment vehicles. Discounted cashflow is not used in these cases (I know it as a way to determine the valuation of a company), things like ROI are used for utility scale projects. And guess why the vast majority is repowered with new panels...
        konschubert 3y ago
        I feel like the of action that makes the most economic sense should be invariant of the exact financing vehicle. (Loan or investment fund).
        hef19898 3y ago
        Feelings are completely irrelevant when it comes to investments in the tens to hundreds of millions. Those things are extremely well defined and unserstood, that's why people in accounting, finance and business development are crucial and have rather high paying jobs. The back of napkin maths I do for household level purchases and investments do not scale to those levels. Nor do they to company level finances. Following those practices are, obviously, no guarantee for success. Not following them on the other hand is a near guarantee for failure.
  - maxerickson 3y ago
    It's the other way around, the suitability for a power plant makes the land valuable (and that value driver is relatively unlikely to go down over the lifetime of the plant, for the reasons that lots of people have already commented on). The reason I said the other comment was banal is because it amounts to "do what makes sense", which well, yeah.

KolmogorovComp 3y ago

An old solar farm is invaluable, because it means you have already got all the administrative authorisations to operate (that can take years in Europe), and also already connected to the grid, with the infrastructure around to maintain the farm (clean/fix panels, security, etc.).

TylerE 3y ago
Isn’t that an even stronger argument for upgrading an existing plant in situ versus spinning a new one up?
- tomek_ycomb 3y ago
  I think it's an argument for adding just the number you need to compensate for the power loses Otoh I think people are forgetting there's a point where the maintenance gets to be more
  - dorfsmay 3y ago
    Given that over 40 years they changed everything but the panels themselves, what maintenance?
    - TylerE 3y ago
      Presumably "infrastructure around to maintain the farm" has some costs. Land. Property tax. inspections. That sort of thing...
  - konschubert 3y ago
    Old plants were often designed such that at peak production, they would saturate the grid connection. If you re-power that plant with more efficient panels, your production will sometimes be capped by the grid connection. But it’s fine because you will have significantly higher production in the morning and evening hours. This can make financial sense. I hope they put the used panels on the second hand market, such that users with different economics ( home installs, countries with lower labour and land costs) can buy and use them.

deleted 3y ago

[deleted]

jillesvangurp 3y ago

That's a big if. If you own the land, and have it connected to the grid, it at least has some value. The question then becomes what the value of the revenue is that you are going to gain replacing the panels. That's a simple economic question, it's probably not going to be nothing.

bombcar 3y ago
If the grid connectivity issue is cheap enough and easy enough, it’s much easier to build new ones than knock down and old one and then build a new one. Similar thing to houses, where there is available land to build new ones.

cesarb 3y ago

The most valuable part is not the land itself, it's the grid connection. That is, the towers bringing the power to a nearby substation, the bay in the substation with the circuit breakers and measuring equipment (adding new bays to existing substations is expensive and requires expanding their size), and the budgeting for the amount of instantaneous power the solar farm can generate. Transformers in substations have a limit to how much power they can convert, and the other circuits leaving the substation (and recursively, all these things in the substations they connect to) have a limit to how much power they can carry. Here in Brazil, we have already gotten to the point where the bottleneck to adding new grid-scale solar and wind is often not the land or the panels/turbines, but the amount of power the grid can carry, especially between the Northeast (which has lots of wind potential and plenty of solar potential) and the Southeast/South (where the power consumption is the highest). A miscalculation in this amount (the solar and wind power plants did not react as specified to a power disturbance, so the calculations were too optimistic) was a major factor in the recent country-wide blackout (https://en.wikipedia.org/wiki/2023_Brazil_blackout https://en.wikipedia.org/wiki/2023_Brazil_blackout but that article seems to be missing the later updates from https://www.ons.org.br/Paginas/Noticias/Ocorr%c3%aancia-no-SIN-em-15-de-agosto-de-2023.aspx https://www.ons.org.br/Paginas/Noticias/Ocorr%c3%aancia-no-S...).

KennyBlanken 3y ago
> The most valuable part is not the land itself ...What? > Here in Brazil Ah. When your country is destroying 8,000 square km/year in Amazon rain forest (and disappearing the indigenous people who live on it), yeah, I guess you would think land is 'cheap.' Anyway - you're missing the point. The "cost" is lost opportunity. At a certain point, between increased new panel efficiencies and the currently installed panels losing efficiency, the operator is missing out on enough power generation that they can upgrade and make more money in the long run.
gwern 3y ago
I'm not really following your point. If the land/space is not the bottleneck but the grid, then that makes the idea of leaving old panels in place all the better. As the electrical output falls by the aging panels and underutilizes your grid connection, you could just top them up with new panels, up to the limit of your grid connection (putting them in the spare land you have by stipulation). The question would seem to be, at what point is the marginal profit from the trickle of electricity from fully-depreciated old panels less than the cost of ripping them out & selling the scrap? Presumably there is such a point, as the old solar panels increasingly approach zero electrical output, if their materials aren't so worthless as to not even be worth the cost of scrapping.

benj111 3y ago

In a situation where a land owner has more land than solar, and the land is already hooked up to the grid, and permissions etc are relatively cheap, and the limiting factor is the cash to install new panels, then yes, it makes sense to build a second new farm rather than replace the old. Most situations aren't like that though. If you have limited land, it makes sense to make it more productive, if you need to spend significant amounts to set up a new farm over and above the raw panels, it makes sense to reuse what you already have.

infecto 3y ago

I think this mostly plays out for residential or other consumer level generation setups. It is doubtful this makes sense at the commercial level and recyling/reusing does make sense.

GaggiX 3y ago

Well, if they change them, we can buy used solar panels for dirt cheap. Many already do.

ahartmetz 3y ago

I initially thought the same, but then I did the maths (sloppily). Reasons for repowering would be that newer modules are more efficient for reasons other than age (in the case of the Swiss array, new modules would be over twice as efficient) and that the modules are a fraction of the cost of the array - modules are very cheap now. In a very naive calculation, a module pays for itself in less than a year https://ourworldindata.org/grapher/solar-pv-prices https://ourworldindata.org/grapher/solar-pv-prices (assumptions: $0.26 / kWh, more than 1000 full-power hours in a year). A new module (again naively, without installation or capital costs) replacing a 20% degraded one would then pay for itself in about five years. So, I guess we are now in a situation where solar modules are almost free - there are now other problems to be solved and they seem difficult, storage especially...

mercutio2 3y ago
You’re off by an order of magnitude in the value of wholesale electricity. Wholesale rates for non-dispatchable electricity are under $.02 / kWh.
iforgotpassword 3y ago
I think this is what gp meant by "unless land is valuable"... Just build the new array next to it otherwise. :)
- konschubert 3y ago
  The cost is in the mounting and the inverters. If you can re-use them, it might make sense re-power.