But could the demand for solar panels be responsible for the rising cost of silver?
Researchers from Kent Business School examined the relationship between solar panel tech demand and silver price.
Silver is a key element in the manufacturing of solar panels since it has the highest electrical and thermal conductivity of all metals. In each solar panel, you’ll find approximately 20g of silver, equal to about 6.1% of the total cost of the price of building each unit.
The Kent team used data from quarterly silver prices measured from the London Bullion Market, installed solar energy capacity and solar gross electricity production between 1990 and 2016 in order to map the correlations in demand and costs.
What the data proved was a clear, simultaneous increase in silver prices and solar panel demand after the 2008 global recession, indicating the causal relationship between these two variables. Prices also rose again after 2011 when there was a worldwide concern that oil prices were climbing too high, resulting in a move towards renewable energy sources.
The researchers added that if prices continue to rise it could make solar panels production and subsequent sales cost much higher. This could even require intervention from governments in the form of energy credits or sales tax waivers to make them more cost-effective and encourage a transition to these renewable energy options.
Another event that could occur: an increase in the development of solar panels that use materials instead of silver However, breakthroughs required to use alternative materials, such as aluminum or copper, are not expected to occur for some time and currently remain far below the quality of silver.
“The research shows that silver price rises are directly linked to the increase in demand for solar panels. 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,” said lead author on the research, Ph.D. candidate Iraklis Apergis
The paper, Silver prices and solar energy production has been published the journal Environmental Science and Pollution Research.
Story via University of Kent.