The photovoltaics (PV) market has for the past several years been a big consumer of silver; in fact, it is now the single largest consumer of silver printing pastes, beating out even the big traditional markets like printed circuit boards and polymer thick-film membrane switches. Partly thanks to government subsidies, the solar industry has grown dramatically, including a significant growth spurt in 2010 followed by strong growth again in 2011, even in the midst of a worldwide recession.
But NanoMarkets anticipates significant challenges to the status quo in the PV market in the coming decade. The PV sector as a whole is entering a period of flat or moderate growth in the next couple of years, the industry remains highly cost sensitive, and government subsidies are waning. Meanwhile, the ongoing shift in market share toward thin-film PV (TFPV) is changing the nature of the addressable market for silver materials in PV. Specifically, there is an ongoing shift in demand for silver in PV applications from market-dominant crystalline silicon (c-Si) PV, which uses large quantities of silver printing pastes for front electrodes, to TFPV that, in most cases, requires far less silver.
There is some good news, however, and in our report we identify areas in which suppliers of silver-based materials have opportunities to expand their business. Most of the opportunities center on providing new silver-based products that help the panel makers reduce manufacturing costs. Examples are: new silver printing pastes with reduced silver loadings that do not sacrifice performance; new printable silver materials that enable the fabrication of finer resolution silver traces; and new nanosilver-based options that enable low-cost, solution-processable and/or printable fabrication of transparent front electrodes.
Changes in the PV Market That Affect Silver Consumption
First, the success of the PV industry is closely tied to the construction industry, which is still struggling in several important markets. According to a fairly recent issue of The Economist, there are a number of important countries where residential real estate is still overvalued, including Australia, Canada, France, Sweden, Spain and the U.K. And this slow construction growth affects the c-Si PV market the most—the sector that today uses the largest quantities of silver materials.
Second, governmental support in the form of consumer subsidies, tax breaks, and loan guarantees is under considerable challenge around the world, as governments look for ways to reduce budget deficits. We think that in most countries, many of the incentives that have supported the PV industry over the last several years will be reduced significantly. In some cases, subsidies are being supported with renewable energy mandates, but there are no guarantees that these mandates will be successful in achieving their goals in the long run.
All of these factors could have very serious consequences for firms selling materials into the PV sector. Germany, currently one of the largest PV markets, recently announced sharp cuts in feed-in-tariffs (FITs) that support its PV industry. The ramifications of these cuts are not yet fully known, but when the Spanish government took this step a few years ago, the PV market in Spain declined by 75 percent.