Our competitors raced to build up capacity for battery – primary battery recycling, hoping the market was going to keep going up, hoping the supply of batteries was going to grow extremely quickly. And instead those commodity prices fell, the tsunami of supply didn’t materialize and pain became the norm throughout the industry. Many of these competitors have not relented, and they continue operating on the hope that the market’s going to perform to their models. We made the strategic decision to exit this market. We executed an opportunistic sale of our battery recycling facility in 2023, and we partially realized our investment in Green Li-ion. Now, as Corrado says, we believe Green Li-ion has a unique position in this market as a value-added operator downstream, but we still see future monetization of that position as well.
Now, in 2023, we pivoted to solar panel recycling. The EIA is projecting a million tons per year of end-of-life solar panels available for recycling by just 2030. The first solar boom was really over 10y ears ago in the Southwestern United States. Solar panel manufacturers quote an average life of around 20 years. What we see in the market is that the reality is much shorter than that, and these panels are already starting to come into the recycling space. In early 2023, Dr. Villamagna joined us and came with a proven process to recycle these laminated systems, with prior success in other materials. We’ve been able to develop a first mover advantage, including an advantage in sales, with California being our primary source market, as well as building on top of an advantage in permitting an operation in Nevada, we have longstanding relationships with the Nevada Department of Environmental Protection that have allowed us to move very quickly on the permitting side.
Today, in 2024, we’re operational. Our demonstration facility in Silver Springs, Nevada is processing panels today. We’re quickly filling up our existing storage capacity from customer contracts, and we’re getting recognition on the local and the national stage. As Corrado mentioned, Senator Cortez Masto visited last week to tour the facility and learn more about our process. Not only is Senator Cortez Masto our Senator from Nevada, she also sits on the very important Senate Energy and Natural Resources Committee that defines a lot of policy around this area. And her support has been very welcome. As we move forward from here, we’re planning to build at least three 100,000 ton per year facilities with an expected cost of $12 million each to get to operation.
We’re going to bootstrap this with project level financing for each of these projects. And this is going to be publicly supported financing, including industrial development bonds, USDA Rural Development financing, and potentially 48C tax credits from the Inflation Reduction Act, of which a new program was announced this week for renewable energy projects. The best part about this business is it moves very quickly. We expect it to be self financing in just two to three years. We’re planning to stage our expansion over the next four years. Facility number one is our demo facility that’s operating today. That facility is going to scale to full capacity operating three shifts later this year. We’re using this demo facility to shake out our process and to ensure a rapid and successful scale up as we move to the larger facilities.
You see here, the expected timelines for these projects are short, one year to go from funding to initial operations, and one year to go from that initial operation to operating at full capacity. We’re staging this out over several years, these are conservative projections. We think there’s a good chance that we can beat this schedule and move even quicker than this. As we think about our capacity build over the next several years, we’re looking at 75,000 tons of capacity by 2026, to 150,000 tons by 2027, and over 300,000 tons by 2029. The pace of this growth is going to be dictated by the demand. For each of these facilities, we’re establishing storage capacity in advance of the production capacity. We’re filling up that storage capacity with revenue producing inventory.
This is an interesting industry because inventory is a source of cash, not a use. That inventory contributes to the funding of the build to these facilities. We’re not going to do what the battery guys did. We’re not going to build excess capacity. We’re going to manage our market risk, and we’re going to move at pace with the demand in the market. Again, we think these projections are conservative and we expect this market to grow much quicker than this. The projection results from this plan would produce over $125 million in top line annual revenue in just five years, with $100 million in net profit for an 80% operating margin. It’s a very capital efficient business, a very capital efficient growth program. And again, it becomes self funding in just three years, which sets us up for future growth to continue to pace growth in the market.
Before I finish, I want to touch on one last point. I’m getting a lot of questions about how do we price our services? What does it cost to recycle a solar panel? And I mentioned last quarter that this is not information we’re planning to share publicly. There’s a few reasons why. First off, this is truly a service business, not a commodity business. Every contract is unique, every contract is negotiated, and our sales team is motivated to seek the highest price possible for our services. Secondly, our customers are really marking up our services. We’re acting as a destination. The solar installer who’s taking down old solar panels is also seeking for the largest price it can get for the removal and disposal of those old panels. And those customers expect that we’re going to keep our pricing confidential in order for them to have the best position in negotiations.
Our competitors here today are really landfills. We’re cost competitive with hazardous waste landfill pricing, which is also generally a negotiated, non-public price. For this reason, we think it’s prudent to keep this information confidential and let our sales team operate to the best of their abilities. So I’m going to wrap up there and turn back to Corrado and look forward to any questions on this as we move.
Corrado De Gasperis: Excellent, Billy. Thank you. That picture is of the smaller facility, about 7,000 square feet, sitting next to the industry scale facility, which is well over 100,000 square feet on that same campus. I just want to reemphasize, though, how strongly this achievement hits on our financial, natural and social objectives, foundation of how we plan and what we’re here to achieve. Financially, it’s a huge local market, way over 10x the capacity of one facility, we’re looking at this thing going to a million tons in a relatively short period of time. And as Billy said, we can adaptly, versatilely, quickly deploy capacity as we need it. But even a conservative plan against that million tons throws off nine figures of cash flow.
