Silver Could See Slow Upside From Solar Panels Amid Chinese 'War On Pollution'
New York (Mar 13) Silver may not fare as well as some investors hope, even if the "war on pollution" by the government of China -- the world's largest maker of photovoltaic panels (PV) -- phases out coal-power plants in favor of solar powered cells, which require significant volumes of silver.
Silver paste is used in crystalline silicon PV, according to industry association the Silver Institute. The European Union and the U.S. have even complained that China, the world's largest maker and exporter of PV, floods their markets with artificially cheap solar panels and kills domestic producers.
The reason that silver prices may rise is simple: if China’s leaders crack down on pollution, as avowed last week, China’s energy production could shift from coal-fired electricity plants towards alternative energy, like solar panels, driving up demand for silver. That’s the case made by ETF Securities in a note earlier this week.
Solar panel uses take up about 5 percent of annual silver supply, estimated ETF Securities research director Mike McGlone. Last year the Chinese government also mandated an increase in domestic solar capacity to 25 gigawatts by 2015, a further drive to demand, he added. A gigawatt is enough to power between 750,000 and 1,000,000 U.S. homes.