According to the Silver Institute, global industrial silver demand is expected to grow 8% this year due to strong demand in all key sectors, including the PV industry.

The overall global demand for silver is expected to grow 8% year-on-year to reach 111.2 billion ounces in 2022, according to U.S.-based independent precious metals research consultancy The Silver Institute.

“The increase will be driven by record silver industrial fabrication, which is forecast to improve by 5%, as silver’s use expands in both traditional and critical green technologies,” the analyst said. “The outlook for silver’s use in the photovoltaic (PV) industry remains bright. Government commitments to carbon neutrality have resulted in a rapid expansion of green energy projects.”

Considering that the global photovoltaic market may cross the 200 GW threshold for newly deployed capacity this year, The Silver Institute also predicted that silver demand in the solar industry may reach an all-time high in 2022, without providing specific figures.

“Silver industrial offtake (accounting for more than half of total silver demand) is projected to strengthen further, establishing a new record high in 2022. Ongoing improvements in the global economy will give silver industrial applications an additional boost, mitigating near-term headwinds from supply chain bottlenecks and the challenges in certain regions from the ongoing Covid pandemic,” it also stated.

The average silver price for 2022 is expected to reach $24.80 per ounce, which would be around 1% lower than $25.14 a year earlier. The Silver Institute said that, despite the slight drop, this year’s average price still represents a historically high annual average.

Due to increasing silver prices, the share of silver in PV module costs rose last year by around 5% to account for approximately 10% of the total, according to U.S.-based analyst Matt Watson.

In June 2020, The Silver Institute noted that the ability of PV producers to reduce silver content in solar cell production – a process referred to as ‘thrifting’ – had reduced since 2016 but they anticipated the average 111mg of the precious metal needed for each solar cell in 2019 would nevertheless fall to 80mg by 2030. With silver prices on the rise, or at the current levels, it is expected that the rate of thrifting will continue to increase.