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You can sell damaged gear to speciality dealers for that type of gear: (ie weapon and armor merchants)
You can also sell any damaged equipment to tinkers (you can also buy it, but there's no point to doing so). If you want to do item-crafting at the tinkers, using damaged gear as ingredients works just fine (and is a lot cheaper than getting undamaged stuff for it), so is preferable if you've already got some.
Damaged energy weapons (and shields, and possibly a few other things) can be repaired by using a longzhu sphere on them. Those turn up after about the first third of the game, but they're never very common. If the equipment installed on your ship (which is normally impossible) they can also be repaired by using an enhancement item (eg. a hexagene booster for a blast weapon). In future versions this might get easier since we've been asking for that to move over to an item-picker rather than the current "enhance currently selected and installed thing" system.
Finally, Rasiermesser and possibly makayev factories (not dealers) offer repairs on items that come from those companies, but by that stage in the game it's generally not worth it. (If you do the Dvalin collect-a-thon at his Rasiermesser plant he'll also take certain damaged not-for-sale gear towards his development program)
Some mods also add other ways to deal with damaged gear, but that's specific to each mod. Might be worth looking into it once the Workshop is up and running smoothly (currently it's having teething problems) though.
Generally, I would advise not to pick up damaged gear unless there's a dealer you know you can sell it to something nearby. The damage chance is mostly there to stop players looting a huge number of functioning weapons very quickly.
Longzhu spheres ftw