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A: Silver is essential for a green economy. Therefore, as the world moves towards a lower carbon economy, the industrial demand for silver is expected to rise.
Two significant “green” uses for silver are in the coatings of photovoltaic cells (“PV’s”) for solar power, and on all electronic contacts in electric and hybrid vehicles (“EV’s”). We cannot have solar power or electric vehicles without silver.
There is not enough silver used in each photovoltaic cell or electric vehicle to affect their prices, but there is most definitely enough forecasted growth of PV’s and EV’s to affect the price of silver. Demand for these two green applications are forecasted to grow sharply over the next ten years.
Silver plays a vital role in the production of solar cells that produce electricity, and solar power is one of the leading renewable energy sources worldwide. Despite the COVID pandemic, the PV market proved to be very resilient in 2020, with solar capacity growing by 2% to 130 GW for the first time ever. Solar power represents only 3% of annual power generation worldwide so it still has lots of upside potential.
How is silver used in solar cells? Silver powder is turned into a paste which is then loaded onto silicon panels. When light strikes the silicon, electrons are set free and the silver – the world’s best conductor – carries the electricity to capacitors for delivery to the power grid or stores it in batteries for later use.
The average PV panel of approximately 2 square meters can use up to 20 grams of silver. This is approximately half of silver consumption per panel in 2010 due to improved nano-film technology and substitution by other materials, and the silver offtake per panel has stabilized in recent years.
The PV market continues to expand geographically as 18 countries achieved the 1 GW mark last year, compared to just six in 2010. This led to silver offtake in PV reaching 101 million oz (3,142t) in 2020. Some analysts estimate this amount must double to 200 million oz by 2030 to meet rising demand.
Automakers today are increasingly relying on silver to enable the technological advances incorporated into modern vehicles. In 2020, an estimated 60 million oz of silver was consumed in the manufacture of conventional internal combustion vehicles, primarily as silver coatings on all electronic contacts. This has resulted in another powerful demand center for silver, with projections of nearly 90 million ounces of silver absorbed annually in the automotive industry by 2025.
Silver’s widespread use in automobiles reflects its superior electrical properties, as well as its excellent oxide resistance and durability under harsh operating environments; Silver is used extensively in vehicle electrical control units that manage a wide range of functions in the engine and main cabin; These functions include, among others, infotainment systems, navigation systems, electric power steering, and vital safety features, such as airbag deployment systems, automatic braking, security and driver alertness systems.
Average vehicle silver loadings, which are currently estimated at 15-28 grams (g) per internal combustion engine light vehicle, have been rising over the past few decades. In hybrid vehicles, silver use is higher at around 18-34g per light vehicle, while battery electric vehicles are believed to consume in the range of 25-50g of silver per vehicle. The move to autonomous driving should lead to a dramatic escalation of vehicle complexity, requiring even more silver consumption.
Ancillary services that require silver are also increasing. This covers a range of supporting infrastructure, such as roadside and domestic charging stations, additional electrical power generation and distribution and induction charging. To put this into perspective, by 2029, there will be 10 million public charges and 50 million private charging points. Looking further ahead, the infrastructure needed for artificial intelligence and the internet-of-things will also be supportive of higher silver industrial demand.
There are many other fast-growing applications for silver such as 5g telephonics and antibiotic/antiviral coatings that are just now emerging as demand centers. Silver’s baseline electronic demand coupled with its multitude of new and growing uses should assure the metal a key role going forward. To conclude, the future looks bright for silver’s industrial demand in “green” applications such as solar power and electric vehicles.