The Chinese State Council has recently raised the country’s solar generating capacity by 67% from the previous targets. India’s plans to make big investments in solar power panels may take the silver photovoltaic (PV) demand to record new heights. The big push in silver demand is expected to drive the grey metal prices to substantially higher levels in the years to come.
The solar industry makes use of the photovoltaic (PV) technology to convert solar radiation to generate electrical power. The typical PV solar panel uses large amounts of silver. The silver demand by the PV industry has soared in the past several years. According to data, the PV industry consumed only less than 1 million ounces of silver in 2000. By 2008, the silver demand shot up to 19 million ounces. The demand exceeded 47 million in 2012. Today, the PV industry accounts for nearly 6% of the total industrial use of silver.
China had earlier set the country’s 2015 target for solar generating capacity to 21 gigawatts. In its recently concluded review, the China State Council raised the target by walloping 67% to 35 gigawatts. The Council estimates the installed capacity for solar electricity to grow at an annual rate of 10 gigawatts per year. Going by the targets, the country’s installed capacity is set to record a mammoth 400% increase by 2015, from the 2012 installed capacity of 7 gigawatts .
The future of PV demand lies in emerging countries in the East such as China and India. Japan is also poised to make big leaps forward in use of solar energy. The demand from China and Japan alone is projected to account for almost 11% of the global mine supply. The big push by Asian countries for solar energy could accelerate demand growth and send forward silver prices.