Doubt and Research, Part 1: Rare Earth Elements

Tellurium, produced in order to create cadmium telluride, used in some solar panels. Courtesy of Pacific Northwest National Laboratory.

Tellurium, produced in order to create cadmium telluride, used in some solar panels. Courtesy of Pacific Northwest National Laboratory.

After running into that “solar fleecing” site that described solar leases as a scam, I had some trepidations about the contract we had just signed.  After all, this was a 20-year commitment.  Since we had a window of opportunity where we could cancel the process, I got online and did my research.

My worries related to that particular site were quickly dispelled once I realized that it was created with the ulterior motive of drawing in customers, preferably to their loan system (which simply makes you indebted to the bank rather than a solar leasing company; for a more rational, less partisan comparison of solar loans vs. solar leases, visit EnergySage).

The site also tries to convince visitors to patronize them by articulating something that I already knew to be true: leasing solar panels is not as good of a return on your investment as buying solar panels outright.  This argument seems to be articulated mainly for those people who can afford to buy panels in the first place—and as I’ve said before, for that group of folks, buying solar panels outright is the way to go.  It’s an amazing investment right now and you can more directly reap the benefits of the various tax incentives that are in place.  But as someone who can’t afford the upfront costs, this isn’t really applicable to me.

So further research dispelled that “solar fleecing” anxiety.  However, one big worry that lingered in the back of my mind was an issue that a couple of my friends had brought up—namely that many solar panels are made using rare earth elements.

As Stuart Elms (CEO of UK’s Viridian Solar) points out, “rare earths” is a bit of a misnomer.  While cerium oxide is sometimes used in the production of solar panels, most of the elements involved aren’t technically among the rare earth elements of the periodic table.  However, getting to some of these resources can be tricky.  Most notably, cadmium telluride (CdTe) is used to create inexpensive and efficient photovoltaic film.  Cadmium (Cd) is not rare.  It’s a waste product of many other mining and manufacturing processes and photovoltaics are actually a safe place to put it, since it can be hazardous when not combined with other elements.  Tellurium (Te), however, is three times rarer than gold, and getting your hands on it is geopolitically complicated (China controls about 95% of rare earth element exports and 47% of US imports of tellurium, for instance, so Chinese markets have a lot of global economic impact when businesses do things like reduce mining operations).  The worry is that solar panels might not be that great of an idea if they are dependent on finite resources and can’t genuinely create a sustainable future.

USGS_rare_earth_oxides_production_graph

This is a complex issue, and the debate continues from many perspectives.  My take on it: The use of rare earth elements and scarce resources is a real concern in the production of electricity-generating solar panels—but even more so in the production of energy-consuming products like computers and cell phones which also use rare earths, are totally pervasive in every aspect of our lives, and don’t contribute any electricity back to the larger system.  And while finite resources like oil and coal are simply burned away (emitting greenhouse gases that change our planet’s climate, with the energy produced never to be captured again), tellurium is being used in photovoltaics to contribute energy for 30 years or more, after which they can be recycled to be used in future solar panels.

Increased photovoltaic recycling has meant that there’s more tellurium to go around outside of its raw production.  If unit efficiency of tellurium continues to improve as predicted, the impacts of photovoltaic recycling processes are expected to create a decline in tellurium demand after 2020, even though more people will want solar panels at that time.

In addition, some solar panels are made without the use of CdTe, and research continues into the development and manufacturing of more affordable options that don’t use rare elements.

The Center for Alternative Technology gives a very thorough explanation of the less-than-perfect steps involved in the production of photovoltaics (all the way down to safety concerns involving Cadmium that only arise in industrial fires exceeding 1050 degrees C), but also gives a great response for why it’s still a good idea to use solar panels:

“…it is important to take these issues in context. All electronic equipment can cause these concerns, and whereas many electrical goods are only designed to last for a couple of years, PV panels are expected to last for at least 30 years (here at CAT we have some that are 15 years old and still functioning well). Furthermore, PV panels are used in place of other sources of electricity which have a much greater environmental impact per unit of electricity generated.”

Really what this whole issue brings up is the glaring fact that every aspect of the manufacturing supply chain (for any product) is steeped in millions of tiny lesser-evil decisions that add up to a massive unsustainable system.  For far too long the driving incentive behind our consumer culture (and corporate culture of the bottom line) has been affordable materials, with little thought to hidden costs and externalities.  Externalities basically occur when entities outside the (imagined) closed system of a private business are unwittingly harmed or benefited by the actions of that business (such as people breathing toxic fumes from a factory, or any ecological impact that a company has).  As many scholars point out, when private businesses minimize costs from their own manufacturing process, it is often the natural environment (and the people it surrounds) that take the actual burden of that cost.  In the study of externalities, there’s even an argument to be made that arrangements like solar leases—where companies share the burden of risk with a consumer—can lead to the reduction of environmental externalities by encouraging companies to innovate.  More on that later.

Put simply, we need more companies built on systems thinking.

Having fewer tchotchkes in our lives (and recycling those items that we’re done with—especially electronics) is a good thing.  Getting solar panels is a good thing.  They may look like really big tchotchkes, but they’re actually busily displacing their carbon footprint through the production of renewable electricity.

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4 thoughts on “Doubt and Research, Part 1: Rare Earth Elements

  1. It is great that you were committed to do a thorough analysis of the financial and environmental implications of your solar decision. I admire your passion. It is curious though that you were not able to uncover some relatively widely available data.

    Regarding CdTe, it is used only in some thin film technology, which is used in commercial applications, accounting for about 5% of total worldwide pv production. CdTe is not a factor in residential or smaller commercial installations.

    While you are in agreement that purchasing a solar system outright is the best financial decision, you concluded this is an option only for those with money to invest. Typically (and I understand there are atypical circumstances) if one can qualify for a lease program, they likely also qualify for a decent loan which can still provide a reasonable ROR and NPV. Whereas a solar lease is simply not an investment, and also can complicate the future sale of the property. There is enough data available now that it is widely accepted a customer owned solar system is an asset that increases property market value and decreases marketing time of a home sale.

    True, solar leasing is not a scam. Lease or purchase, solar will save you money, and if environmental impact and/or reduction of dependence on fossil fuels is a goal, either has the end result. I commend your decision to go solar.

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    • Interesting point about CdTe–thank you for sharing! It just further supports the larger point, which is that people shouldn’t be too concerned about this issue, and that solar panels are a net good.

      As for leasing vs. loans: I think loans might be the right choice for some people. In this blog, I try to explain my own perspective for why and how we made our choices. So in explaining solar loans, I explained why we chose not to go that route. Leasing, for us, reduced a great deal of friction that would have otherwise prevented us from getting solar panels at all–upfront costs, installation, legal process with permits from the city, permission from the utility, etc. Since my fiancée and I are relatively young, new homeowners, both working regular jobs, we were glad there were companies who were willing to shoulder the burden of these “onboarding” expenses and time commitments. Meanwhile we are able to switch to solar sooner (and thus have more of an immediate environmental impact) and still have lower electric bills for the duration of the lease.

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      • Any quality installer handles all details/paperwork for permitting, utility interconnections, REC registration, etc. One reason solar leasing companies get a bad reputation is they make it sound as if they will alleviate that “burden”, when in fact the homeowner does not have to handle those issues in either scenario. The only paperwork a homeowner has to handle on their own is filing their taxes for their 30% federal tax credit. I did not read your earlier blog entries, so trust your decision made sense for you.

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  2. Pingback: To Be Continued… | My Solar Journey

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