The Solar Silver Bullet

Government Mandates

Converting sunlight into power is still a future market with high growth potential. According to a study by the DG Joint Research Centre of the European Commission, enormous progress has been made in the adoption of photovoltaic technology, especially in Europe, where the installed capacity is estimated to average around 14 gigawatts per year. By 2020, it is estimated that the installed photovoltaic capacity will reach 100 gigawatts in Europe alone. And according to a study by the European Photovoltaic Industry Association (EPIA), this milestone was already passed worldwide in 2012. The aim is to produce as much electricity as possible from sunlight.

Fox news reported back in May that California, with a population of 39 million people, has passed a law mandating that all new home construction must have to have solar panels on the roof. That’s all going to take silver. You can read more about it here. This won’t be the last government to implement these sorts of mandates to meet emissions targets.

Industrial Use Case

Why is silver used for the metallisation of solar cells? Silver is extremely conductive, especially resistant to corrosion, solders well, and remains stable in the long term. This is important, because solar cells have a service life of up to 30 years, and sometimes even longer.

CPM commodity analyst Yvonne Li said in a presentation marking the release of the group's 2018 Silver Yearbook, “though the photovoltaic industry has been cautious in its outlook, demand for solar power generation has continued to exceed expectations”. Silver demand from the photovoltaic sectors has exploded from about 20 million oz in 2008 to about 107 million oz last year and is expected to remain at that level in 2018, Li said.

Dr. Arno Stassen of Sol Voltaics also explains with conviction “given the current state of knowledge, it is inconceivable that the precious metal silver could be replaced, since no other material fulfils the requirement for ‘cost in relation to performance’ in a comparable manner. Silver is also excellent due to high process stability.” 

Below is a table from the Silver Institute which clearly outlines the exponential grown of the Photovoltaic industry demand from insignificant in 2008 to one of the largest use cases in 2017.

Additionally, with the ever-increasing adoption of electric vehicles, demand for silver for this industry will naturally increase. Silver is a major component in electronic circuitry. Its properties as a metal make it unique and sought-after as a conductor - with the highest thermal and electrical conductivity of any metal element. It is known to be an extremely malleable metal which makes it easy to bend and shape. Silver is one of the most reflective metals, along with aluminium and gold. Such is its versatility, there are more patents issued for ideas which utilise silver than there are for all other metals combined. As just one example, silver paint is used on circuit boards and is able to be reduced to nanoparticles which combine high reflectivity and conductivity when used in conjunction with laser applications and light sensitive fibre-optics.

At Ainslie, we think seriously about the essential role that silver plays in such a wide range of uses and therefore consider it to be a worthwhile component of any effectively diversified investment portfolio. We believe it is often overlooked but may be about to gain a more substantial status as more people discover this ongoing, yet undervalued, success story.