What Repo Man Can Teach Us About Solar's Residual Value
If you’ve never seen Repo Man, Alex Cox’s 1984 sci-fi comedy tale of a kid who gets caught up in the repo business, starring a very young Emilio Estevez, it’s highly entertaining, and highly recommended. But the repo model also has some interesting value for the future of solar power.
But what does repossessing cars have to do with solar panels?
In this article from Greentech Media, Colin Murchie asks, “What happens to solar systems once the Power Purchase Agreements (PPAs) under which they were installed expire?”
Generally speaking, what happens at the end of an agreement term is that the consumer and the investor are responsible for removing the outdated panels. The cost of removal can be so high that there are actually companies offering replacement-removal insurance, or even demanding a fund be set up to cover these future costs.
But what if someone started a business to repo the panels, set them up on some highly undesirable land and then sell the electricity? If a residual value market developed, it would lower the costs and therefore the barriers to more robust solar development.
Of course, solar panels last a long time, and why would anyone want to take them down, anyway? Nevertheless, everything gets outdated sooner or later, and at some point in the future, uninstalling panels (and either marketing the electricity or selling the panels for scrap) may provide as many jobs as installing them.