Who will pay for the decommissioned photovoltaic modules? Evidence from evolutionary game analysis of China’s photovoltaic industry under dynamic incentives

Abstract

Following the booming of the PV industry, the tide of photovoltaic modules decommissioning is developing fast to raise environmental concerns. The recycling and conversion of decommissioned photovoltaic modules (DPV) becomes a pressing challenge for the industry to sustain growth with less environmental burdens caused to the society. This study introduces Extended producer responsibility (EPR) and Environmental protection tax (EPT) into the governance framework of DPV recycling. Employing evolutionary game theory, this study develops a tripartite evolutionary game model comprising the government, PV enterprises, and households, based on which the interactions and strategic changes among them are revealed. Moreover, the evolutionary trajectory of DPV recycling industry, as well as the impact of driving factors on their strategic changes are verified through empirical simulations of China’s PV industry. It was found that DPV recycling industry will progress through three stages, namely initial stage, middle stage, mature stage, in which the government plays the role of leader and gradually withdraws its participation as the industry evolves. The dynamic incentives are effective in promoting the adoption of EPR, and the mixed incentives with a baseline of a comprehensive recycling rate of 70 % set by the government work best. The recycling efforts and the conversion benefit value promote DPV recycling through EPR by PV enterprises. Heavy environmental protection tax and heavy landfill costs also drive the implementation of EPR. It is suggested that China should implement regional incentive schemes incorporating regional characteristics to encourage DPV recycling locally. This study has certain reference values for the policy and strategy formulations to promote the development of DPV recycling industry.