House Mountain Partners

GW

Enough To Go Around? Raw Materials and Limits To Growth in Solar

Chris BerryComment

 

By Chris Berry (@cberry1)

For a PDF version of this note, click here.

The growth in the adoption and deployment of solar power since silicon solar cells were first discovered by Bell Labs in 1954 has been nothing short of staggering. The globally installed PV market stands at 140GW and added over 38GW in 2013 alone. In the United States in the first half of 2014, 53% of all new electric capacity came from solar, according to the Solar Energy Industries Association. While still small relative to the overall global energy mix, the rate of solar growth is what to focus on and it is indeed taking off.

 

As to the question of whether that growth can be sustained, the politically sensitive issue of subsidies seems to get all of the press. To me, there are other, larger, and perhaps more immediate issues regarding PV growth.

 

One concerns reliable access to the raw materials necessary to build and supply global PV supply chains. Specifically, I’m referring to the copper, silver, silicon, indium, etc. vital to produce existing and future solar technologies. How much do you as an investor, industry watcher, or company representative really know about the origins and supply reliability of the metals and minerals used in PV manufacture? Another issue to be watched is the changes in PV technologies and also the rate at which the technology is adopted. This also has implications for global supply chains. 

Case Study of a Growth Driver - Silver Use in Solar

Chris Berry

By Chris Berry

 

Since the beginning of the commodity downturn in 2011-2012, I have been vocal on the need to analyze each metal or mineral individually as they aren’t all created equal. You run the risk of throwing out the “baby with the bath water” and missing investment opportunities.

The same argument holds true when you look at individual demand components for a given metal or mineral. With that in mind, recent research I’ve done on the solar photovoltaic (PV) manufacturing industry has shed light on some astounding growth rates for one metal in particular: silver.

Solar Backgrounder

I don’t intend to enter into the debate about the economics of renewable energy here, but do believe that solar power is going to continue to become more and more mainstream as costs along the entire value chain continue to plummet. A good primer on how PVs work can be found here.