Silver demand was at record levels in 2022 and there is reason to believe it will continue to run hot over the next several decades. One reason is the rapidly increasing demand for silver in the green energy sector. In fact, an Australian study projects solar cells may use most of the world’s silver reserves by 2050.
Due to its outstanding electrical conductivity, silver is an important element in the production of solar panels. It is used to conduct electrical charges out of the solar cell and into the system. Each solar panel only uses a small amount of silver, but with the demand for solar panels growing exponentially every year, those small amounts of silver add up.
According to a research paper by scientists at the University of New South Wales, solar manufacturers will likely require over 20% of the current annual silver supply by 2027. And by 2050, solar panel production will use approximately 85–98% of the current global silver reserves.
According to data from the Silver Institute, silver offtake for photovoltaics reached a record 113.7 million ounces in 2021. That compares to only 50.5 million ounces in 2013. Final figures aren’t in for 2022, but analysts estimate solar panel production used about 127 million ounces of silver last year.
The paper also noted that more efficient ‘N-type’ technologies now being developed require even more silver than current ‘PERC’ cells that make up more than 80%of the current market.
Some argue demand for silver in solar energy production will eventually flatten as the industry develops cheaper alternatives to the white metal. But according to the paper, even if the industry reduces the use of silver, demand will still increase.
The results show that the current rate of reduction in silver consumption is not sufficient to avoid increasing silver demand from the PV industry and that the transition to high-efficiency technologies including TOPCon (a more advanced N-type silicon cell technology, first scaled in 2019) and SHJ (Silicon heterojunction solar cells, which are very efficient) could greatly increase silver demand, posing price and supply risks.”
Silver possesses the lowest electrical resistance among all metals at standard temperatures. According to a Saxo Bank report in 2020, “Potential substitute metals cannot match silver in terms of energy output per solar panel.”
Further, due to technical hurdles, non-silver PVs tend to be less reliable and have shorter lifespans, presenting serious issues for their widespread commercial development.”
The study said recycling silver also won’t significantly dent supply issues.
Over the longer term, the recycling of older solar modules could provide a significant source of silver. However, further investment and research is needed here, and it may still be several decades before the volume of PV waste processed each year is enough for more than a marginal contribution of new silver.”
In the fall of 2021, Australia, France, India, the US, and the UK announced the launch of the “One Sun, One World, On-Grid” initiative. The plan is to connect solar energy grids across borders. This could provide a big boost to silver demand.
With billions of government money pouring into renewable energy, the solar industry is somewhat shielded from economic downturns. Even if the economy goes south, governments will continue to fund solar projects and other green energy initiatives. This means the green energy sector will likely drive demand for silver into the foreseeable future.
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