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ALTERNATIVE ENERGY
Fortis/VM Group predict solar energy will boost silver demand

The Fortis/VM Group’s Silver Book says silver demand in solar energy is expected to almost triple by 2012. The solar industry is expected to be a major consumer of silver in ten years.
Author: Tessa Kruger
Posted: Wednesday , 08 Oct 2008

JOHANNESBURG -

The solar energy sector is expected to become a robust driver of the silver market in future as silver demand in solar energy is forecast to increase to about 1,270t by 2012.

The Fortis/VM Group's latest Silver Book says silver demand from the solar panel sector was only 432t in 2007 based on the assumptions of maximum silver loadings per installed wattage of 0.12g/W, 4GW production (2007) and a 10% market share of non-silver containing thin film PV units.

However, future projects appeared very promising for silver demand in solar energy and therefore silver demand in the solar sector was forecast to increase to almost 1,270tby 2012 at 22GW of production. This forecast was based on the assumption of an annual 5% decrease in silver loadings per watt as efficiencies improve and market share of thin film technology rising to 25%.

The Silver Book said its conservative estimate for photovoltaic (PV) growth to 2012 was 13GW, which brought its estimate of silver demand for that year down to 1,111t. But the most aggressive industry forecast was 52GW, which would imply 4,446t of silver.

Photovoltaic (PV) or solar cells are used to convert sunlight to electricity. PV cells are semiconductor devices that produce electricity as long as light shines on them.

"Like any high and low forecast, the truth would probably lie somewhere in between, but we can say that this industry is going to represent a robust and growing item in the future silver supply/demand balance," the VM Group said.

The group based its forecast on a number of assumptions and factors, such as bringing down higher PV costs per watt relative to the traditional energy sector, governments offering incentives to embrace the environmentally clean source of energy and the continued market dominance of silver-loaded crystalline silicon cells. Crystalline silicon cells currently account for 90% of the PV market.

"While we expect reduced silver loadings, due to improved efficiencies and the ramp up in market share of thin film modules, we also believe that within the next ten years the solar energy sector will be a major consumer of silver, over and above previous forecasts," said the book.

The Silver Book added it expected the recycling of PV systems to be insignificant over the next 10-15 years, due to the relative youth of the industry, the long life of PV units and the huge cost and logistical effort needed for collection of these panels.

"Of greater threat to the industry would be a collapse in fossil fuel prices and/or the appearance of superior non-silver conducting media, which would write silver's future out of this sector." The book noted that so far there was no sign of this happening but the solar energy sector was a fast-moving industry in a rapidly changing world.

The recent growth in the PV sector should be sustained on the back of high oil and gas prices and the knock-on effect on retail energy prices.

The Silver Book said the era of cheap electricity generated from fossil fuels was over; even though the world probably had at least 500 years of coal reserves, the climate cost of burning carbon was becoming "unsupportable". It said alternative energy sources will increasingly become a way of life.