It’s been about a year since we last talked about silver’s multi-faceted role in industry — from computer electronics to medical technology — but that hardly means the sector has remained stagnant.
In fact, to the contrary.
The Silver Institute recently reported that strong investor demand and healthy industry usage for silver has been on a steady rise in 2014.
Interestingly, the main driver of the white metal’s recent appeal has come not from existing sources of industrial demand, but rather from a completely new and rather unexpected channel: solar energy.
The Silver/Solar Connection
The focus on renewable energy over the past decade has led to a number of key advancements in the energy sector — foremost among these, the promise of photovoltaic solar panels as a viable means of achieving sustainable energy production.
A photovoltaic (PV) cell is an electrical device that converts light energy from the sun into usable electricity, and silver is a key component in the production of these cells. In fact, every solar panel contains approximately 20 grams of the white metal.
The relatively subdued silver prices — which have stayed right around the $20 mark for much of this year — have further encouraged solar industry participants to snatch up large quantities of silver while the getting is good.
In response, demand for silver is on pace to top 57 percent this year compared to 54 percent last year, according to Reuters.
“Looking further ahead, precious metals consultancy firm, Metals Focus, says industrial demand for silver will grow by at least 5 percent annually through 2016. That’s higher than forecast global GDP growth during that period.”
Keep a Watchful Eye East
It seems one can’t talk about commodity demand these days without mentioning China — and with good reason. Nearly a fifth of the world’s population call China home, and in the last few years the government has made a strong push toward “cleaning up” its environmental policies.
Production of solar panels in China has doubled every year since 2003, creating something of a “solar boom” in the Land of the Rising Sun.
Record demand, in turn, is forcing the solar industry into a looming shortage of PV cells, caution industry experts. When this happens, the solar market could see a temporary slow down until supply is again able to meet rising demand.
And all the while, silver demand will likely see steady growth. As a silver investor, that’s exactly what you want to hear.
Security with Silver Bullion
Silver’s industrial applications give the white metal something of an edge over gold, allowing investors a way to balance their financial assets, even while precious metal prices remain volatile.
If you believe in the potential of solar energy as a source of future renewable energy, then you should consider positioning yourself to reap the benefits by adding silver bullion to your portfolio today. Bullion is a cost-effective, convenient way to diversify, and silver is very affordable right now.
Why do you invest in silver?
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Good catch Jason. Good article too. 20 percent, I never woulda thunk it.
And the production of solar panels in china has already crashed.
Great article, but for the record: Japan is the land of the rising sun.