Could a Rise in Silver Price Destroy Solar energy?

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Could a Rise in Silver Price Destroy Solar energy?

As someone who studies ecology, I believe that the energy provided from the sun is the only long-term alternative energy strategy. The planet constantly tests it's inhabitants and photosynthesis always remains on top as the core energy source for all living things via photosynthesis. 

I came upon this article today that makes me feel like any significant rise in silver price would obliterate any hope of a solar energy recovery (not that I really had all that much hope anyway). Maybe silver suppression is the only thing making photovoltaic and synthetic photosynthesis options viable?

http://www.reuters.com/article/2012/12/31/silver-solar-idUSL4N09D2BB20121231

Edited by admin on 11/08/2014 - 05:08
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Silver demand from

Silver demand from photovoltaics drops by a third in 2012 from 2011 record

* Demand drops even as solar panel sales increased about 9 percent

* Long-term prospect bright for solar power and photovoltaic silver demand

By Rujun Shen

SINGAPORE, Dec 31 (Reuters) - Surging silver prices have cut demand from the solar power sector by a third this year from 2011's record highs, and the decline will continue next year as the industry that uses nearly 5 percent of global silver supplies scrambles to cut costs.

Silver paste is a key component in the photovoltaic panels that dot the roof tops of houses and buildings to trap the sun rays for electricity generation.

A nine percent increase in silver prices this year, on top of a tripling in prices since end-2008, has forced many panel manufacturers to reduce the amount of metal they use, even though sales of panels are rising.

As a result, silver consumption by the industry plunged to 40 million ounces (1,244 tonnes) in 2012 after touching a record of more than 60 million ounces in 2011, following years of rapid expansion, according to metals consultancy Thomson Reuters GFMS.

Expectations that prices of the precious metal may rise as much as 38 percent in 2013 will only encourage the industry to further cut usage.

"It suddenly went from not counting for anything to 20 percent of cost for cell makers," said Charles Yonts, an analyst at Credit Lyonnais Securities Asia, a Hong Kong-based brokerage.

"Since it was so unimportant, the R&D engineers hadn't paid any attention at all until last year to reduce silver consumption. And from then, they've done it with a vengeance."

DEMAND RESILIENCE

Silver demand slumped even as solar panel consumption increased 8 percent in 2012 to about 30 gigawatts, according to data from NDP Solarbuzz, a research and consulting firm.

Apart from rising costs, the solar power industry is also grappling with overcapacity and tumbling product prices as panel demand from the key European markets weakens as the euro zone'seconomy slumps. Trade spats involving the United States, the European Union and top panel maker China created more trouble.

The photovoltaic demand in 2011 was nearly ten times the wattage in 2007, Solarbuzz said. A median forecast by industry officials and analysts is for 10 percent growth next year.

"Gradually people have been using less silver and that trend will continue in the future," said Finlay Colville, vice president of NDP Solarbuzz.

"As the reduction in silver usage is faster than the growth of the solar industry, there is going be a decline in silver use."

Poland's KGHM Polska Miedz S.A., BHP Billiton and Fresnillo Plc, the world's top three silver producers in 2011, contributed a combined output of 117.5 million ounces, about 15 percent of the world's total silver mine production, according to GFMS.

Much of the world's silver is mined as by-products of other metals, including copper, lead and zinc.

Because silver is the best conductor, solar panel manufacturers have little choice but to rely on the metal, which means long-term demand will remain resilient.

"In the short-term, the solar industry faces the problem of oversupply. But in the long run, demand should grow steadily and silver paste demand will grow, too, because substitution of silver will not progress very fast," said Carl Lee, spokesman at Gigasolar Materials Corp, a Taiwan-based paste maker.

Growing environmental awareness is also likely to boost the industry's future prospects, solar panel manufacturers say.

"We are believers that this industry has a solid future and will continue to get back longer-term to double-digit growth," said Ellen Kullman, chairman and chief executive officer of leading silver paste supplier DuPont, at an earnings conference call in late October.

"It's just not going to happen in 2013."

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Silver demand from

Double post, sorry

atarangi
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We are the answer - - -

Solar and wind, can power the average household  without any significant loss of quality of life. Of course all energy on earth is solar anyway. Human greed is destroying everything. Decentralised energy will save us all.

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Photo voltaics - -

The price of silver is not a significant issue in the economics of solar panels.

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Thank you Atarangi for

Thank you Atarangi for replying. According to this article, silver went from being an insignificant cost to 20% of the production costs. This is a silver price of 33 dollars or so. Here is the quote.

"It suddenly went from not counting for anything to 20 percent of cost for cell makers," said Charles Yonts, an analyst at 

Credit 

Lyonnais Securities Asia, a Hong Kong-based brokerage.

"Since it was so unimportant, the R&D engineers hadn't paid any attention at all until last year to reduce silver consumption. And from then, they've done it with a vengeance."

Maybe they could cut the majority of silver out of the panels or all together, but there is no way the panels would continue to be as energy efficient. 

Here is another important quote

Apart from rising costs, the solar power industry is also grappling with overcapacity and tumbling product prices as panel demand from the key European markets weakens as the euro zone's economy slumps. Trade spats involving the United States, the European Union and top panel maker China created more trouble.

 

So this is the scenerio. We are facing rising costs (silver price and inflation), economic slumps (which we know is just the beginning), and trade issues amongst the major powers. We know all 3 of those problems are going to increase over the next several years.

It looks to me that these factors are going to seize solar panel production in a period of time where an alternative energy focus is critical to maintain some standard of living that we are use to (assuming you believe that we are running out of retrievable oil).

This is not a very fun discussion, so I apologize, but I think it is important to try to understand all aspects of a market that we feel strongly about.

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maybe

No need to apologise. This is an interesting topic, at least to another ecologist (me). And it does have a bearing on the economics of silver and the price suppression agenda. 

I don't know the answer but I suspect the solar power industry would suffer under a silver price spike. And it wouldn't be surprising if this slowed growth in the alternative energy sector over the years ahead, increasing consumption of declining oil/gas supplies. What this means for standards of living I have no idea, but hopefully it means that companies stockpile when prices dip (now) keeping silver prices above the freefall zone.

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It seems likely that as

It seems likely that as silver prices rise due to inflation and/or scarcity, the solar panel makers will innovate to use thinner wiring, and more efficient manufacturing techniques. There is obviously practical limits on the husbandry they can achieve.

However is it not also likely that at the same time, energy costs will rise, thus keeping silver as a viable and desirable component in energy producing devices?

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Argentus, they are already

Argentus, they are already reducing silver content in the cells. The problem is that they can't replace silver totally because it is a keystone element when you need to maximize conductivity. The second most conductive metal is copper and it is 9% less conductive than silver. A high energy return is required in order to compete with oil, and that 9% is a big deal when trying to maximize a return on investment.  Here is another interesting article.

"DuPoint is working aggressively to reduce our customers’ reliance on silver as a basic conductive material, to reduce cell and module costs today and enable a more stable cost structure in the future."

DuPont’s great white hope comes in the form of a material called Solamet (PV17A), a photovoltaic metallization paste, which was launched in February 2011, and is expected to be made more commercially available in lower-silver forms later this year.

Read more: http://www.pv-magazine.com/news/details/beitrag/the-pv-race-to-replace-silver_100003885/#ixzz2LlaWpT52

Thanks for the discussion guys.

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heaven is in our mind - - -

Argentus has correctly pointed out the relative factor. Nothing will be a problem with solar. In fact the cost of solar power is rapidly diminishing. I am currently building solar powered cars. Solar just needs a paradigm shift in thinking. My own solar car performs well for shopping and around town duties. People have only got to accept that cars need not be tanks.                       Houses and cars can be fully solar right now. We are conditioned to believe in centralised power and control. The moment we drop collectivist thinking - life becomes heaven on earth.

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