Solar Power, Silver and Full-Cycle Sustainability

Solar Power, Silver and Full-Cycle Sustainability

In its first phase of growth, photovoltaics saw its primary uses in densely populated countries with significant dependencies on foreign oil. Two things happened: Germany and Japan became the countries with the highest percentage of renewable energy production (which includes wind and hydro-electric power); Chinese manufacturers aggressively entered the market and became the main suppliers.

Presently, however, we seem to have entered a second round of expansion where countries larger in size are beginning to cover suitable surface areas in solar panels for the purpose of power production:

  • China, going back and forth on targets, appears to be aiming at up to 35 Gigawatts (GW) of solar-produced power by next year;
  • India just commissioned a 1GW pilot of a 4GW project covering water canals in Gujarat, and installing rooftop panels on a large scale;
  • Saudi Arabia has projected to cover a section of its desert to produce 16GW of power by 2032 as part of a 41GW renewable energy project;
  • Desertec, who had a similar idea and were going to install enough solar panels in the Sahara desert to power all of the European Union, abandoned their project but only because “the European market could supply 90% of its own power demand by 2050.”

Clearly, the world is moving towards sustainability and solar power not only for environmental reasons but also to mitigate risks of geo-political dependencies. The fact that the average solar panel contains between 15 and 20g of silver leads us to assume that this development will not be without impact on silver prices. Or is it?

Few producers will disclose the actual amount of silver contained in their silver pastes used to make the solar panels. Knowing, however, how much power a standard size solar panel produces, and how much silver is presumed to be on it allows us to “reverse engineer” that number. Hat-tip to blogger Albert Sung who had the idea before me and calculated that to produce 1GW of power, enough to cover 750,000 American-style homes, the installed capacity of silver would have to be about 8.3 million ounces. Applying these metrics to the projected GW of photovoltaic power above it is easy to see how solar could equal or exceed the silver volumes previously used in the photographic film industry – a trend already predicted by the Silver Institute in an earlier Tech Metals Insider report. But is that all?

Two trends will shape the future of this application for silver in different ways:

  1. Since silver is an expensive component in solar panels, producers will inevitably work towards lower silver loadings. Models of future growth will have to factor in a discount for this trend.
  2. Solar technology will replace conventional batteries in areas previously inconceivable. “Spray-on” or ultra-thin flexible solar cell materials will allow for their use on or instead of phone housings or car panels, opening an entire new world of applications. Not to mention solar road pavement panels and other inventions that are already on their way to becoming available.

If technology does in fact advance in an exponential fashion then the answer is clear.

By Bodo Albrecht
tminsider@eniqma.com

Credited source: KITCO at http://www.kitco.com/ind/Albrecht/2014-08-08-The-Impact-Of-Solar-Power-Projects-On-Silver-Consumption.html

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