- Silver is a commodity with many uses and applications for all resources, and one industry demanding more silver is solar power
- Silver is specially suited to the solar industry because it is the most reflective metal and is electrically and thermally conductive
- The Silver Institute forecast that solar will consume 14 per cent of silver’s overall output this year, up from around 5 per cent a decade ago
- After the price of silver reached this year’s high of US$26.07 per ounce on May 4, it is still up 15.04 percent in the past year
Silver is a commodity with many uses and applications for all resources, and one industry demanding more silver is solar power.
According to the 2022 World Silver Survey, more than half of the global annual 1 billion ounce silver supply is used for industrial purposes.
Demand for silver is accelerating as changes to solar panel technology requires more of the metal, deepening its supply deficit in the face of little in the way of additional mine production.
What makes silver unique and specially suited to the solar industry is that it is the most reflective of all known metals and it is electrically and thermally conductive. A paste containing silver provides a conductive layer on the front and the back of silicon solar cells.
The metal is seeing more use these days, as the solar industry moves to produce more efficient versions of cells that use it in greater quantities, which will boost its already-increasing consumption.
In the news:
Bloomberg recently pointed to a report from The Silver Institute that forecast that solar will consume 14 per cent of silver’s overall output this year, up from around 5 per cent a decade ago. Much of the growth is coming from China, which is on track to install more panels this year than the entire total in the United States.
Solar is still a relatively small part of overall silver demand, but industry experts estimate big growth ahead.
The world’s increasing demand for solar panels may contribute to escalating the demand and ultimately the price of silver in the coming years. After the price of silver reached this year’s high of US$26.07 per ounce on May 4, it is still up 15.04 percent in the past year (see chart below).
Peter Krauth, editor of SilverStockInvestor and author of The Great Silver Bull spoke to Kitco News and explained that solar alone is 12 per cent of all silver demand every year, at 140 million ounces in 2022.
“The forecasts are about 160 million ounces this year, which I believe are going to be dramatically outpaced when we see the final numbers about a year from now.”
Silver spot price chart – July 2022 to July 2023.
Top TSX silver stocks:
Pan American Silver Corp (TSX:PAAS) is engaged in silver and gold mining and related activities, including exploration, mine development, extraction, processing, refining and reclamation. The company was featured in the “Precious Metals” edition of The Market Herald’s Thematica Report. Over the past five trading days, PAAS stock has risen 1.1 per cent.
First Majestic Silver Corp. (TSX:FR) owns and operates the San Dimas Silver / Gold Mine, the Jerritt Canyon Gold Mine, the Santa Elena Silver/Gold Mine and the La Encantada Silver Mine. In its Q1 2023 results, the company reported 7.6 million silver equivalent (AgEq) ounces produced, consisting of 2.5 million silver ounces and 60,594 gold ounces, up 1 per cent compared with the previous quarter and up 6 per cent compared with Q1 2022. This stock has added 5 per cent in the past five trading days.
MAG Silver Corp. (TSX:MAG) is a silver development and exploration company focused on the Americas. Its flagship 4,000 tonnes per day Juanicipio Project, operated by Fresnillo Plc, is undergoing an expanded exploration program targeting multiple highly prospective targets. In June, MAG achieved commercial production at its Juanicipio Project in Mexico. MAG Silver stock is up 2.8 per cent over the past five trading days.
Solar companies involved in this space:
Canadian Solar Inc. (NASDAQ:CSIQ) is one of the world’s largest solar technology and renewable energy companies. It is a manufacturer of solar photovoltaic modules, a provider of solar energy and battery storage solutions, and developer of utility-scale solar power and battery storage projects with a geographically diversified pipeline in various stages of development. With headquarters in Guelph, Ontario, the company recently announced that it is building a solar photovoltaic module manufacturing plant in Mesquite, Texas. In the most recent five days of trading, Canadian Solar has grown 5.5 per cent.
SolarBank Corp (CSE:SUNN) is an independent renewable and clean energy project developer and asset operator. Its potential development pipeline stands at more than 700 megawatts. In June, the company acquired a 67 per cent interest in the US1 Project and VC1 Project, each located in New York state. While SUNN stock has turned down 7 per cent over the past five days, it is up 195 per cent since May 2023.
As companies pursue more sustainable, less carbon-emitting sources of power, the future for solar cell production is (for lack of a better word) bright.
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