I see the recent slump in silver prices as a buying opportunity; the revolution in solar energy will have a fundamental positive impact on the demand for silver, a key ingredient in solar panels.
Use of Solar Panels Exploding
In 2015, solar panels generating 50 gigawatts were installed around the globe. In 2016, that number jumped by more than 50% to 76 gigawatts. (Source: “Solar power growth leaps by 50% worldwide thanks to US and China,” The Guardian, March 7, 2017.)
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The use of solar panels is expected to explode over the next few years as major industrialized nations get on side with the “The Paris Agreement”—a carbon emissions reduction accord.
And solar energy cannot work without silver.
Solar Panels & Silver Prices
The average solar panel uses 20 grams of silver, which equates to just over two-thirds of an ounce. (Source: “You can’t have solar without silver,” USA Today, August 29, 2014.)
As more solar panels are installed, more silver will be needed. And, with the supply side of silver showing no growth, the result will be upside pressure on silver prices.
Silver Mining Companies: An Opportunity
Dear reader; I know that most investors these days are focused on the rising stock market, with precious metals taking a back seat. But this scenario has played out so many times before. When financial markets take off, precious metal prices fall. When financial markets fall, precious metal prices take off.
With stock markets near record highs and the prices of precious metals still far below their 2011 highs, the old adage of “buy low, sell high” makes perfect sense when it comes to the depressed share prices of senior and junior silver mining companies.
