Growing solar power sector to drive silver demand for the next decade -Heraeus
(Kitco News) -The growing demand for solar power is generating a brightfuture for silver as governments worldwide continue to look to develop greenrenewable energy, according to one European precious metals firm.
In a report published Monday, Analysts at Heraeus said thatthey are bullish on silver and see significant long-term potential. Thecomments come as silver prices manage to hold above $24 an ounce. Decembersilver futures last traded at $24.290 an ounce, down 1% on the day.
“With solar PV energy identified as a critical technology inmeeting long-term goals to curb global warming, there is considerable upsidefor the silver market over the next decade,” the analysts said.
The analysts noted that solar power growth accounts for 11%of silver’s industrial demand and consumed 101 million ounces last year. Thefirm added solar power generation is expected to hit new record through thisyear and next.
“By 2022, PV installations are forecast to exceed 200 GW forthe first time on record, with silver consumption moving closer to ~140 millionounces,” they said.
The solar power sector has been receiving a lot of attentionas world leaders gather in Glasgow, U.K., for the United Nations Climate ChangeConference (COP26). Last week Australia, France, India, the U.S. and the U.K.launched the One Sun, One World, On-Grid initiative, which plans to create across-border inter-connected global power grid.
“Realizing One Sun One World One Grid through interconnectedgreen grids can be transformational, enabling all of us to meet the targets ofthe Paris Agreement to prevent dangerous climate change, to accelerate theclean energy transition, and to achieve the Sustainable Development Goals,”said a statement from the newly minted committee.
Some deligates at COP26 are pushing governments have net-zero carbon emission by 2050.
Although silver is a critical component for solar panels,Heraeus analysts also noted that market demand is not without its issues. Theysaid that silver is the second most expensive component in solar panels, whichhas led to companies to use less of it, also known as thrifting.
“While thrifting is expected to continue reducing the silvercontent of solar cells while prices are high, there is a limit to how much canbe removed before efficiency losses outweigh cost benefits,” the analysts said.
The renewed interest in silver comes as prices manage tohold above $24 an ounce. Because of its growing industrial demand in the greenenergy revolution, many analysts have described silver as an essential metalfor future economic growth.
Along with its industrial demand, silver hasbenefited as a monetary metal alongside gold as investors look for newinflation hedges in an environment of rising price pressures.
By Neils ChristensenFor Kitco News
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