A rise in demand for solar photovoltaic (PV) panels is effecting the worldwide price of silver in a big way.
New research from the University of Kent has revealed that increasing demand for solar panels is having a significant impact on the global price of silver. As a result, a higher silver cost could mean solar panel production costs will dramatically rise in the future.
Silver is a core element required for the manufacturing of solar energy panels.
Silver is necessary to make solar panels because it is the highest electrical and thermal conductivity of all metals. With an estimated 20g of silver required per panel, this means silver makes up 6.1% of the total cost of the price associated with building each panel.
As such, the researchers from Kent Business School at the University of Kent, examined to what extent the increasing demand for these panels to be used as renewable energy sources is responsible for the climbing cost of silver.
In their study published in the journal Environmental Science and Pollution Research, the researchers mapped the correlation in demand and costs for solar PV systems, and analyzed data between 1990 and 2016. This data included quarterly silver prices measured from the London Bullion Market, installed solar power capacity and solar gross energy production.
The researchers’ data revealed a rise in silver price at the same time as greater demand for solar panels.
For instance, a rise in silver price occurred after the 2008 worldwide recession, when there was an increased demand for the panels. Likewise, the price of silver rose again after 2011 when there was global concern oil prices were becoming too high, resulting in an upswing of renewable energy sources.
“The research shows that silver price rises are directly linked to the increase demand for solar panels,” said lead author on the research Ph.D. candidate Iraklis Apergis, reports Phys.org.
“This will likely have major implications for the longer-term use of solar panels and may require new alternative technologies to ensure solar panel production is cost-effective, or government subsidies,” Apergis added.
In regard to using alternative material to manufacture solar panels, breakthroughs have yet to occur and are not likely to occur anytime in the near future. The reason is that alternative materials such as copper and aluminum are still far below the quality of silver.