Eric Sepanek
SBC Founder
Eric Sepanek is the founder of Scottsdale Bullion & Coin, established in 2011. With extensive experience in the precious metals industry, he is dedicated to educating Americans on the wealth preservation power of gold and silver.
Solar demand could eat up almost 100% of the annual silver supply in the next 25 years, according to a report. The shiny metal plays a crucial role in solar panels, electrical vehicles, and other green energy applications. As governments implement sustainability practices to combat climate emissions, experts are expecting a significant surge in silver demand. At the same time, an economic transition away from conventional, dollar-backed assets to physical investments enhances silver’s potential. These considerable shifts would lead to more purchases which would boost silver prices. These significant shifts are likely to drive increased purchases, ultimately pushing silver prices higher.
What does the report say, exactly?
Researchers at the University of New South Wales looked into projected silver purchases from the solar industry years down the line. Scientists predicted that solar energy will require 20% of the silver supply by 2027 and between 85% and 98% by 2050. These numbers were based on current trends, governmental goals, and other relevant data.
Silver Solar Demand in Numbers
- Solar energy could use up to nearly 100% of the silver supply by 2050.
- Silver demand has tripled over the past 10 years in the solar sector.
- Over 130 countries have implemented renewable energy policies, with solar power being a major focus.
- In 2023, solar PV installations accounted for three-quarters of the new renewable energy additions.
How will that impact prices?
Many factors influence silver prices, but industrial demand is a leading indicator of the shiny metal’s trajectory. Usually, prices rise with purchases as buyers end up outbidding each other on limited resources. Many experts are projecting higher price movement in the near to long term. For example, private investment bank UBS sees silver reaching up to $38/oz which would be a 22% jump from current levels.
Silver Supply vs Demand
While the report focuses on booming demand, silver purchases aren’t the only driver of potential price increases. Experts predict a 17% increase in the global silver deficit, suggesting strong tension between supply and demand. The shrinking availability of also contributes to silver’s bullish sentiment. This tightening supply, combined with growing purchases, supports a bullish outlook for silver prices, as constrained availability tends to push values upward.
Macroeconomic Movers
Industrial demand might have an outsized impact on silver prices, but weakening economic conditions are boosting the metal’s forecast too. An increase in safe-haven demand has investors parking their wealth in gold, silver, and other physical commodities as traditional markets grow unstable. The Federal Reserve’s drastic rate cuts are expected to further weaken an already fragile dollar, accelerating a shift toward non-traditional assets. These factors largely underpin gold’s current record-setting rally which could be indicative of what silver is setting up to do.
Silver’s Quick Moves
Given that the silver market is significantly smaller than gold’s, price swings tend to be swift and dramatic. This means investors might be facing a shrinking window of opportunity to acquire silver at relatively low prices, positioning themselves for potentially higher long-term returns.
With experts raising their price forecasts upward following gold’s impressive rally, it may only be a matter of time before silver follows suit. Entering the market now could yield substantial gains as prices are poised to surge.