Policy design of government subsidy for end-of-life solar panel recycling

Abstract

Solar photovoltaic systems can reduce carbon emissions by harnessing green energy from the sunlight, however, tremendous end-of-life solar panels may pose a threat to the local environment in the coming decades. What's worse, fewer regulations have been mandated to deal with the disposal of solar waste. To address this issue, this paper investigates a game-based, government-subsidized solar recycling model, and extends the model to a dynamic system. By analyzing the equilibrium outcomes, optimal decisions are revealed for all stakeholders. More importantly, we find regulatory subsidies can benefit all members of the solar recycling chain. Furthermore, when confronted with low-quality solar panels with a high degradation rate, we suggest that the government announces a low R&D subsidy rate. Even so, the level of the manufacturer's R&D efforts is still high, which leads to more R&D subsidies provided by the government. Based on an analysis of the dynamic system, it's better to be extremely careful when the government enacts the subsidy policy. Otherwise, the profits of all the chain members may be hurt due to the bifurcation and chaos phenomena.