Another way to look at it is that by using solar for mining, other forms of capacity are not wasted in the same way. The waste is then in using up of materials and manufacturing that would go to "ordinary" use otherwise.
1. We build 1TW of solar panels, PoW mining uses that 1TW to do useless work.
2. We don't build 1TW of solar panels, and don't do that additional 1TW of useless work.
Worlds 1 and 2 have the same impact on the electricity grid. But in world 1, we're emitting a whole lot of CO2 and consuming a whole lot of rare materials to build solar farms and electronics, while in world 2 we don't. Clearly world 2 is better for the environment?
Unless some very serious technical breakthroughs happens in more efficient manufacture, energy capture efficiency and energy storage, by the point that around 1% of Earth is covered in solar panels, Earth probably ran out of "useless" land space and materials to make solar panels and the associated infrastructure to actually use said energy to something useful.
That's rather the point; tech breakthroughs happen when there is a drive to achieve something, increased demand for solar causes that pressure to strive and thus increases the likelihood of innovation. The more panels that are built, the better we get at building them, innovate, repeat.
