Silver’s bright future: How solar energy is powering demand
Solar power is a standout energy source in the race to reduce carbon emissions globally. The technology has been improving for decades, and we are now on the cusp of a rapid expansion in the capacity of solar to power industry, homes and innovations everywhere.
For anyone considering investing in silver, this makes the solar industry one to watch.
As solar installations surge, there could be a direct translation into higher demand for silver.
Boab Metals (ASX: BML) is proud to be a leading near-term lead-silver mining company on the ASX, poised to supply high-grade ore to a growing renewable energy market.
The use of silver in solar PV panels
Silver is a vital component in solar photovoltaic (PV) panels. Silver enables efficient capture and conversion of sunlight into electricity thanks to its unsurpassed electrical conductivity.
The average solar panel contains 0.643 ounces (20 grams) of silver, around 3.2 to 8 grams per m2. According to The Silver Institute, this added up to 140 million ounces in 2022.
However, that number is expected to grow sharply in the coming years.
China’s solar industry is powering ahead
BloombergNEF reported in May that China had lifted its outlook for solar panel installations in 2023 to 154 gigawatts (GW), up from the previous forecast of 129 GW.
That number could rise again next year to between 200 and 300 GW. Between January and the end of April, the country installed more than three times the number of solar panels compared to the same period in 2022.
For comparison, the US had 73.5 GW of solar capacity operating in early 2023, with plans to install 54.5 GW by year’s end. Australia, a minor but eager player, is on track to add around 2.2 GW of capacity.
What does this mean for the global silver shortage?
It’s no secret that silver is in short supply.
In 2022, strong silver demand created a record-high 237.7-million-ounce deficit. This year, more of the same is expected, and China’s rapid solar growth could put more pressure on a tight market.
The 2030 forecast of 185 million ounces of silver consumed by solar panel production could even be brought forward to 2023 or 2024.
As demand for silver continues to rise, silver mining companies on the ASX will become imperative in addressing the shortfall. High-grade silver ore from responsible sources ensures a sustainable supply chain for critical industries such as renewable energy.
Silver is also completely recyclable. New technology is emerging that has the potential to recapture close to 100% of silver from PV panels. However, we are still years away from a large-scale rollout.
Leading the charge on Australian silver
The increasing adoption of solar as a clean and renewable energy source, coupled with technology advancements and favourable government policies, is driving the expansion of the solar energy market.
For near-term silver mining companies like Boab Metals, that means a ready market with a big appetite for high-grade metal.
The solar PV opportunity is just one reason investment in silver is rising. For more information about investing in silver, check out the Boab Metals blog and investor centre.