A landmark ruling is casting a shadow over Europe’s booming solar industry with manufacturers and buyers of solar panels facing a potential stand-off over recycling costs.
Following legal action brought by a Czech company, the European Court of Justice (ECJ) partly placed the financial burden of disposing of old solar panels onto buyers – a decision that could have far-reaching implications for the rest of Europe, according to senior lawyers.
Perez-Llorca, a leading law firm in Spain, is now recommending operators check their contracts with solar panel manufacturers regarding shipments made to the EU between August 13, 2005, and August 13, 2012.
Juan Rodriquez Carcamo, a partner in the law firm and specialist in EU law, said that the ruling made in January 2022 by the ECJ partially invalidates a previous directive on waste electrical and electronic equipment (WEEE Directive), which had placed the financial burden of the disposal of solar panels on the manufacturer.
In its ruling, the European court said that because the 27 members of the EU previously had the freedom to place the obligation of paying on either the manufacturer or the user of solar panels before 2012, the WEEE directive could not be applied retroactively.
This means that in the absence of any clear guidelines on the issue from the EU in the months since, manufacturers of solar panels sold in Europe between 2005-2012 could potentially challenge the obligation to take on recycling costs, putting the financial burden on operators.
“So far, the judgement of the ECJ appears not to have been tested in Europe, but it is only a matter of time before a producer defends their right and uses this judgement,” Mr Carcamo warned.
“These panels have a long, useful life of around 15 years, so in 2022, we are seeing panels that entered the market in 2007 coming to the end of their life and so this obligation on producers to take back and recycle the panels they sold is potentially costly.”
While the ECJ ruling currently applies to legal action brought by a Czech company that claimed Czech authorities had wrongly transposed the EU directive into domestic law, Mr Carcamo, said the decision is likely to affect other members of the bloc.
He further claimed that some major manufacturers were already considering counterclaims, arguing that the EU’s 2012 rule change rendered them unable to foresee, at the time they designed the panels, that they would be required to finance recycling costs.
Brussels-based Sonsoles Centeno, who is also with law firm Perez-Llorca, added: “Since 2012 the rules have been clear, but in respect of panels that entered the market between 2005-2012, the question arises over who is responsible for waste management.
“In some cases, the user can check their agreement and see who is responsible. In my view, contracts during that period should be reviewed by both parties. The ECJ ruling opens the door for producers to argue it is not their responsibility.”