As the solar photovoltaic (PV) market continues to expand, with 18 countries achieving 1 GW installation capacity in 2020, silver’s offtake by the PV industry reached 101 million ounces (Moz) or 3,142 tons in 2020.

According to the ‘World Silver Survey 2021,’ by the Silver Institute, the demand for the precious metal surged despite an 80% drop in the average silver loading per cell over the last decade.

The drop in silver loading was caused by the metalization process, which shrunk the average width of the electrode, busbar, and finger (both are electrical conductors to collect the direct current on the PV panel) from 100μm (micron) to 30μm.

Yet, silver’s share in the total solar module costs at the end of 2020 had risen to around 11% due to the rise in the silver price and lower module manufacturing costs.

Cost pressures should continue to weigh on the silver content, with the finger width expected to drop by 30% to 20μm by 2025. Although thrifting and substitution of silver are unavoidable, it is difficult to quickly replace due to concerns over production compatibility and reliability issues of the alternatives.

Silver thrifting, however, does have the benefit of lowering cost. The economies of scale and huge efficiency gains have cut the cost of solar electricity on average by almost 90%. It has helped solar power become the most competitive source of renewable energy, which helps explain optimistic projections of future capacity growth.

New generation cells (such as hetero-junction back contact cells) also have the potential to drive costs down even further, often through efficiency gains.

According to the report, the energy storage market is expected to grow exponentially over the next few years and in favor of silver. From only 4.5 GW last year, new storage capacity additions are forecast to more than double to 10 GW in 2021 and jump to over 40 GW by 2022. The wide-scale adoption of these storage systems is projected to drive the renewable sector further.

This will also help silver offtake in solar deployment and power grid construction. Silver demand is also seen in the electric vehicle segment, both directly in the vehicle and indirectly with infrastructure requirements. All this sets out the strong potential for ‘green silver,’ even if probable thrifting and substitution of silver temper the future demand growth, the report said.

The solar PV and electric vehicle sectors have seen a steady source of silver demand over the past decade. The demand is expected to continue in the coming years as these sectors grow across the globe and in developing nations, in particular. Silver is expected to see a demand rise in 2021 as the solar photovoltaics and electric vehicle sectors take off globally.

Leading Chinese manufacturers have said that the spiraling prices of raw materials like glass, polysilicon, and silver since the second half of 2020 have led to a sharp increase in the prices of solar modules. Between June 2020 and February 2021, silver prices shot up by 55%. Silver is mainly used in manufacturing silver paste for solar cell metallization.