Solar power sector cuts use of silver due to steep prices

The solar power sector cut its use of silver by a third in 2012 from 2011’s record highs.

A nine percent increase in silver prices this year was attributed to the decline, which is expected to continue in 2013.

Silver paste is a key component in the photovoltaic panels that dot the roof tops of houses and buildings to trap the sun rays for electricity generation.

According to metals consultancy Thomson Reuters GFMS, silver consumption by the industry plunged to 40 million ounces (1,244 tonnes) in 2012 after touching a record of more than 60 million ounces in 2011, following years of rapid expansion.

Expectations that prices of the precious metal may rise as much as 38 percent in 2013 will only encourage the industry to further cut usage.

‘’It suddenly went from not counting for anything to 20 percent of cost for cell makers,’’ said Charles Yonts, an analyst at Credit Lyonnais Securities Asia, a Hong Kong-based brokerage.

‘’Since it was so unimportant, the R&D engineers hadn’t paid any attention at all until last year to reduce silver consumption. And from then, they’ve done it with a vengeance.’’

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