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Silver Studded: Demand Increasing from All Angles
Pinnacle Digest writes: Japan is forcing itself to become the world's leading solar panel market. Needless to say, this is having a direct impact on the silver market. Recently, Japan began offering utility companies 3 three times more for electricity sourced from solar. Clark explains that it's widely expected that the premium will ignite the use of solar power – and solar uses a lot of silver.
Silver is used in photovoltaic (PV) technology to generate solar power. A typical solar panel uses a fair amount of the metal – roughly two-thirds of an ounce (20 grams). Next time you drive by a field of solar panels in Germany, Spain or Texas you will have a pretty good idea the value of silver out there.
To give you an idea of how fast demand for this technology has been rising, since 2000, the amount of silver consumed by solar-panel makers has risen an average of 50% per year.
How much silver is that?
Demand from the solar sector grew from one million ounces in 2002 to 60 million ounces in 2011. That is a lot of silver and demand continues to soar. What's important to note is that is just one application for the precious metal. Silver is used for literally hundreds of industrial applications, of which all are on the rise.
Just to list a few, silver is used in water purification systems, washing machines, air conditioners, and refrigeration. NASA even uses silver to sterilize recycled water aboard the space shuttle.
The Silver Institute forecasts that industrial usage will rise to 665.9 million troy ounces by 2015 and account for more than 60% of total fabrication demand. This is silver that is not used for money, but in many cases used and never recycled back into the global supply.
Although companies are already looking for ways to reduce the amount of silver used in PV panels or to replace it with another element, it will be some time before solar companies find a substitute mineral.
Clark states that, "the growing number of industrial applications for silver represents a long-term shift in this market."