Silver could be the new oil... but we don't have enough of it
Sponsored by and Provided by Noble Gold Investments
Silver is at the center of America's transition to renewable energy, a transition we badly need. America's dependence on oil leads to dependency on other countries. Canada, Mexico, Saudi Arabia, Russia, Colombia, and Iraq are top suppliers of oil.
The US needs to retain control of energy to continue holding political and economic dominance.
Transitioning to renewable energy will give us a fighting chance. Here is the problem; we don't have enough silver. If all the silver ever mined were melted, historical legacy be damned, there still would not be enough silver.
As tragic as that may sound, it sounds brilliant to investors. It is the basis of economics; huge demand and little supply mean a hike in value.
According to the Silver Institute, silver demand for investment grew 36% in 2021, the highest level since 2015. In India alone, sales of silver bars and coins more than tripled.
Emerging Silver Demand
Amazon added five new utility-scale solar projects to power its global operations in China, Australia, and the United States.
Worldwide, Amazon already has 91 renewable energy projects with the capacity to generate more than 2.9 gigawatts, delivering more than 7.6 million MWh of energy, annually. The company previously committed to meeting the Paris Agreement 10 years early and reach net zero carbon by 2040.
In each of those projects, silver is one of the most important metals.
Then there is the US government's commitment to completely replace government-operated public utility vehicles with electric powered vehicles in less than a decade.
Yes, the world is gearing up for an energy efficient era by shifting to solar energy and that means an unprecedented increase in the demand for silver. In fact, for 2022, the silver institute sees a new demand high of 1.21 billion ounces in 2022, up by 16% from 2021. Industrial demand is on track to grow to 539 million ounces (Moz).
But we don't have enough silver
There is one problem. We don't have enough silver to meet all demand [1]. That's why the biggest investors are turning to silver now. They are using silver to hedge against inflation. In several years, there will be a shortage of silver.
It takes about 20 grams of silver to build an average solar panel [2].
The average size of a solar panel is about 1.8 square meters.
It is said it would take covering a landmass the size of Spain with solar panels to meet all our energy needs [3]. That means, we would need 5.62 million tons of silver.
The world's current known official silver reserves assumed to be recoverable from mines, is estimated to be less than 600,000 tons [4].
Throughout history, 1.74 million tons of silver were produced [5]. Let's be generous and say that all of that can be diverted to solar energy. Never mind the jewelry industry, or electronics, including cellphone, computers, and servers. Never mind the silver objects that qualify as antiques or historical artifacts. Let's just assume some extreme measure is to be taken and all the world's silver is to be used for solar energy.
That is still world's away from the 5.63 million tons of silver.
Here is another thing.
Solar panels have a loss of efficiency rate ranging from .2-1% per year, depending on several factors, including climate conditions. Assuming an average loss of .5% per year, we would need an additional 7,000 tons of silver per year to install more panels.
Silver has a great future as an industrial metal. First, because demand is overtaking supply... fast.
Second, the industries needing it are necessary. Aside from solar panels, silver is to be found in many electronic products. It also has growing potential in water purification technologies, welding applications, medical technology and so on.
Silver forecast:
The 2022 silver consumption report is not out yet, but the Silver Institute is already forecasting a record high driven by the growing industrial demands. Their initial report, presented in their Interim Silver Market Review in New York in November 2022, stated that automobile companies' drive to produce more electric vehicles, transition to 5G technologies and government's drive to green infrastructure pushed silver demand up.
There is also an 18% jump on physical investment demand.
Is silver a good investment?
Investing is not a one-size fits all. Always start by consulting a financial advisor. For those who wish to diversify, silver is an asset worth looking into. It is incredibly underpriced. Valuable assets with great demand are worth looking into.
If you want to learn more about silver, start with Noble Gold Investments' "Gold and Silver Investment Guide". You will learn more about silver and gold, how it compares to other assets, advantages, and disadvantages of investing in it. Download it for free.
Disclaimer:
The information contained in this [website/ad/etc] is not intended as financial advice. Past performance is no guarantee of future results. All investments involve risks. We do not guarantee any specific outcome or profit. This [website/ad/etc] does not take into account your particular investment objectives, financial situation or needs. We recommend seeking advice from your own financial or investment adviser.
[1] Ahmad, Mariam, Nov 21, 2022, Silver market to hit deficit this year. Mining Digital
[2] DiLallo, Matt, Aug. 29, 2014, You can't have solar without silver, The Motley Fool
[3] Harrington, Rebecca, Oct, 1m 2015, Here's how much of the world would need to be covered in solar panels to power Earth, Insider
[4] Us Geological Survey, 2021 https://pubs.usgs.gov/periodicals/mcs2022/mcs2022.pdf
[5] National Minerals Information Center, https://www.usgs.gov/faqs/how-much-silver-has-been-found-world