It is a well known fact that the primary driver for silver remains industrial demand. Data from the industry association, the Silver Institute, indicates that industrial silver demand increased 20.7% to 487.4 million ounces in 2010. Silver bears note that supply from mines totalled 735.9 million in 2010, far exceeding industrial demand. However, demand for silver by the solar industry is expected to explode in the years ahead. The Silver Institute reports that "Silver paste is used in 90 percent of all crystalline silicon photovoltaic cells, which are the most common type of solar cell."
Yesterday, Bloomberg/BusinesWeek put out an article which should be of interest to all silver investors: Solar Power is beginning to go Mainstream. The article outlines the rapidly declining cost of solar power over the last twelve months. If the solar industry were to experience a surge in demand, the implications for silver demand would be profound. Among the highlights of the article is the fact that the phase out of German solar subsidies has caused a sharp drop in demand there, and a corresponding surge in supply. The result has been a sharp fall in the cost of solar panels. The current cost for solar power is now $1.34 per watt in mid-September, down from $1.90 at the beginning of 2010, and $4 a watt in 2008.
Bloomberg/BusinessWeek, Jonathan Fahey October23rd:
Solar energy may finally get its day in the sun.
The high costs that for years made it impractical as a mainstream source of energy are plummeting. Real estate companies are racing to install solar panels of office buildings. Utilities
are erecting large solar panel "farms" near big cities and in desolate deserts. And creative financing plans are making solar more realistic than ever for homes.
Solar power installations doubled in the United States last year and are expected to double again this year. More solar energy is being planned than any other power source, including nuclear, coal, natural gas and wind.
"We are at the beginning of a turning point," says Andrew Beebe, who runs global sales for Suntech Power, a manufacturer of solar panels.