Guest Post: Rethinking the Solar Energy Value Chain Through Circularity

 

Dr. Yagmur Arioz recently completed her PhD at Ankara Yıldırım Beyazıt University.

As the world gradually turns away from fossil fuels and shifts its focus toward solar energy, a critical question arises: Is the life cycle of these technologies truly sustainable? What happens to solar panels at the end of their useful life, or can we prevent waste before panels even reach that point?

The traditional “take–make–use–dispose” paradigm is no longer viable. In the context of solar energy, the circular economy must be embraced as an
intelligent system that optimizes energy fluctuations and integrates energy flows across the entire value chain, from production to consumption.

Although solar panels are often portrayed as green heroes in the fight against climate change, they still carry the risk of generating waste throughout manufacturing, installation, and operation. Overcoming this risk requires adopting the “cradle-to-cradle” approach. This vision emphasizes a value chain in which materials are continuously recovered, effectively eliminating the notion of waste and the need for disposal.

Designing components to be reusable, detachable, and upgradable requires questioning actual needs and fundamentally transforming operational models. However, because short-term cost concerns often overshadow these models, they  are neglected hidden champions of the circular economy. Despite UN recommendations, uncertainties regarding the
sustainable management and circularity of solar energy continue in many countries. What is required is the establishment of common standards and the alignment of collection and recycling methodologies across countries.

Discussions on circularity in solar energy often overlook the social dimension. Yet this dimension serves as a powerful lever for
sustaining more livable societies and addressing poverty in all its forms. From China to Africa, and from certain regions of Europe to developing economies, inspiring examples of this transformation are already emerging. When circular solar energy strategies are integrated into impoverished regions, they not only provide an energy solution but also meet electricity needs through circular approaches, directly improving quality of life through access to clean water, sanitation, health, and education.

If we stopped viewing solar panels merely as technical devices and instead reimagined them as instruments of social transformation, embedded within circular economy principles, could we not address not only the global energy crisis but also structural inequality, powered by the sun itself? What may appear today as modest steps and incremental decisions may, in fact, carry the spark of a profound transformation.

OM in the News: Wal-Mart’s Green Revolution

walmart“For a company that has been lambasted for a range of corporate sins, from low wages and deplorable working conditions to accusations of predatory pricing and monopolistic behavior, Wal-Mart’s energy initiative sometimes smells a little like greenwashing,” writes Forbes (Nov. 23, 2015). But Wal-Mart has installed 105 megawatts of solar panels–enough to power about 20,000 houses–on the roofs of 327 stores and distribution centers (about 6% of all its locations). That’s enough to make Wal-Mart the single biggest commercial solar generator in the country. And it intends to double its number of arrays by 2020. It’s all part of a goal that former CEO Lee Scott set in 2005 for Wal-Mart to be powered entirely with renewable energy. (See our 2011 blog regarding the excellent book about Scott: Force of Nature).

Wal-Mart uses an incredible amount of electricity–29,000 gigawatt-hours per year, and its U.S. electric bill is around $1 billion per year. The firm now gets 26% of its worldwide power from green sources, including wind, solar, fuel cells and hydropower. “To make it harder on ourselves,” says Wal-Mart’s energy chief, “everything we do has to make business sense.” If Wal-Mart were worried about making the business case for green energy, it could just follow the lead of other retailers like Kohl and Starbucks, which brag of running their operations 70%-plus carbon-free. But they do so by buying carbon credits or “offsets” to balance out their greenhouse-gas emissions. Instead, Wal-Mart has reduced its energy costs per square foot of retail floor space by 9%.

Wal-Mart gives access to its roof space to SolarCity or other installers, which pay to put up the panels (at a cost of about $1.2 million for the average array). SolarCity then sells the power generated to Wal-Mart under a long-term deal–at a price often cheaper than what the local electric utility would charge. The bad news for Wal-Mart and the entire green energy industry is that the federal green energy tax credit is set to expire in 2017.

Classroom discussion questions:

  1. What is the genesis of Wal-Mart’s green revolution?
  2. Why is sustainability an important operations issue?

OM in the News: GE’s Move to Solar Power

As global demand for solar panels and power continues to explode (from 2 gigawatts in 2007 to 15 gigawatts this year to 75 gigawatts forecast in 2016), GE has just announced that it plans to open the largest solar panel factory in the US in 2013. The company wants its solar energy business to match its $6 billion wind-turbine unit.

Today’s Wall Street Journal (April 8,2011) reports that the new plant will employ 400 people and produce thin-film solar panels sufficient to generate 400 megawatts of electricity annually. This is enough to power 80,000 homes a year. SolarWorld AG (of Germany) currently operates the biggest solar-panel plant in the US (in Oregon) and generates 350 megawatts.

GEs investment of $600 million in solar technology adds to its $3.2 billion deal to buy Converteam, a French power-conversion company. Converteam complements GEs solar effort by converting sunlight into grid-ready electricity. GE says it already has 100 megawatts for its thin-film technology on order.

The move is not only good news for the economy, but means the US will be fighting hard to keep from losing this vast market to China’s government-subsidized solar industry (see our earlier blog on the topic).

Discussion questions:

1. How will GE be able to compete successfully with low-cost Chinese firms?

2. Why is GE entering this market?

3. Why is sustainability an important OM topic (see Ch. 7)?