Soaring silver prices are hampering the solar industry’s ability to compete with fossil fuels.
Panel makers consume about 11 percent of the world’s supply of silver, the material in solar cells that conducts electricity. The metal has appreciated 74 percent to $35.30 a troy ounce on average so far this year from $20.24 last year.
Prices for solar cells have dropped about 27 percent this year and would be even lower if each panel didn’t require about 20 grams of silver, according to Bloomberg New Energy Finance. That’s pushing back the date when companies such as Solarworld AG (SWV) and LDK Solar Co. can deliver solar power at prices that are competitive with traditional energy.
“Global silver prices have gone up a lot, and solar cells use silver paste as the front-side contact material,” Shawn Qu, chief executive of Canadian Solar Inc. (CSIQ), which is based in China, said in an interview. “The increase of the silver costs will give us a challenge in efforts to reduce solar cell costs.”
Prices for photovoltaic solar panels were $1.49 a watt in June, compared with about $1.80 in January, New Energy Finance estimates, as manufacturers especially in China raised production and incentives were trimmed in Europe.
Silver Investment News: Silver’s 74% Surge Creates ‘Headwind’ for Solar Rivalry With Fossil Fuels
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