Written By: Wilhelmina Maria
This is not investing advice. Seek a financial professional before making important financial decisions. Nothing we say or write is a recommendation to buy/sell/or trade any security.
Silver is a unique element that has fascinated investors for thousands of years. And yet one of its most precious qualities has only recently become critical to the future of energy. Over 10% of the silver that is mined today is used for the creation solar panels...a rapidly growing source of electricity. In this article we provide a overview of this element and its properties. We then list the many industrial uses of silver. If you enjoyed reading this article you may want to check out our other silver related article on the Silver Short Squeeze.
Silver and Solar
Electric and Electronics
1. Silver 101
Silver is the 47 element on the periodic table with 47 protons and 61 neutrons. It’s symbol is Ag and is the greatest conductor on electrons compared to all the other elements known. Which means it is able to let more electrons flow through it and at a faster pace than other elements. Silver is more than just a pretty medal in jewelry. It is also the most reflective metal, and a superior choice for brazing and soldering than other medals.
About 60% of annual silver extraction is used for industrial uses with the remaining 40% fulfilling demand from investors. However, this 40% is only an average with wild swings that drive a lot of the price volatility. Silver has been used as a form of money and store of value for at least 4,000 years. It was even considered legal tender in the USA until 1935.
Silver has a high correlation with gold, but is considerably more volatile. The reason for this is size. Total silver stocks are about 10-20 times more abundant than gold depending on which source and measure you use. It's not an exact measure because much of the world's silver stock is in electrical appliances, silver spoons, and other physical stores hed by individuals. Toward the end of the 1970s bull market in precious metals some of these physical stores were melted down to fulfill demand for bars and coins.
Demand from investors tend to drive the price day to day because it can change so rapidly. That's less true for industrial uses. Solar is used for a wide variety of industrial purposes because of its unique properties...many tied to the energy revolution. Electric vehicles use about four times more silver than traditional internal combustion engines. The vast majority of electrical devices like cell phones, computers, drones, sensors...etc...use trace amounts of silver as well. This makes Silver a uniquely important element in the coming age of electric clean power.
2. Silver and Solar
Silver is the best electrical conductor in the world. This is why it is used so widely in technology, more specifically solar panels. Silver is the greatest conductor because it has the most amount of freely moving electrons. This enables it to make successful electrical currents.
Now, how does this work?
This works because in order to make electrical currents you need free electrons to be pushed throughout the current. A solar panel is made up of negatively charged silver on the top half of the solar panel, and positively charged silver on the bottom. Light is the key element to make this work because light is made up of thousands of photons shooting out of the sun.
When a photon hits one of the (either negatively or positively charged) silver cells hard enough an electron can be knocked free. The electron goes to the negatively charged side and is free to move. While floating around it gradually gets sucked into a current of electrons that were also knocked free that can power things like a lightbulb, charge a phone or power a Tesla.
A hole is also formed from the photon hitting the electron out. This hole will be dragged into the positively charged side of the solar panel. So when the electrons come to the other side of the electrical current (the positive side) it can fill up one of the holes.
So the reason why silver is such a good choice when making solar panels is that it has more extra electrons that can be knocked out by the photons, therefore creating a stronger flow of electrons because of the simple reason that there are more electrons available.
Silver has many other industrial uses that we discuss below...
3. Electric and Electronics
Cars are starting to use more and more silver as they start to become more like moving computers. The reason why is because computers use silver in their computer chips. Even before we started using computer chips we used silver in silvered windows, silver coated contacts, and other things. But there has started being a takeoff in how much silver is used in cars because of the advancement of technology. So now there is more and more silver being used inside the car's internal computer. Some things inside cars are made from ethylene oxide which is made from silver. Silver is also used in many electric car charging stations.
Silver Oxide Batteries :
(Batteries made with silver oxide.)
Silver oxide batteries are batteries made with silver oxide. Silver oxide batteries are generally more drawn to by the public more its ability to stay in use for 2 - 3 years. They also keep up the same amount of effectiveness in their long life, while other batteries usually seem to get worse and worse and then eventually are rid of use.
Circuit Boards :
Silver is used a lot when connecting circuitry. The reason is because silver is the best electrical conductor, making it the obvious choice when making a circuit board. Or, more generally, circuits. All of these reasons make silver one of the most used metals when making all types of printed circuit boards. Allowing the circuits to work with the silver supporting the electrical flow of everything.
Silver is one of the best options when making a superconductor. This is because silver doesn’t disintegrate, and only tarnishes when exposed to sulfur gases. Silver is also great for making a super conductor because it is a super conductor. By that I mean it is super at conducting electricity. And not only super, but the best in the world that we know of. Using silver in superconductors is also a good choice because of how fast silver can transmit all the electricity. Silver also makes for a good superconductor because of how much electricity it can hold, more than 140 times more electricity!
4. Brazing Soldering
Brazing is when two things are joined together at temperatures above 600 degrees Celsius. Soldering is when two things are joined together at temperatures below 600 degrees Celsius. So, brazing and soldering are pretty much the same thing.. just at different temperatures.
Silver is a superior element for brazing and soldering other metal pieces such as pipes, faucets, ducts and electrical wires. Without silver, connections would be weaker, more likely to leak or less electrically conductive than the original materials.
Contact Points :
Contact points are when two metals need to be brazed or soldered together. Silver is great for this because it makes a great leak-tight, string, and effective seal. Silver is also great for water piping with brazing and soldering because of its power to get rid of bacteria. Therefore, you have your water pipes cleaning the water that runs through them.
5. Chemical Catalyst
Silver is also used as a catalyst for triggering chemical processes. For example, when trying to make a small explosion with vinegar and baking soda, either one could be the catalyst depending on which one went in last, or which one started the explosion.
Silver is used as a catalyst in the production of many chemicals and compounds. Unlike alternatives, silver is largely unaffected by its use as a catalyst, losing only 2% in each process allowing nearly all to be reused afterward. As a result, demand as a catalyst is largely driven by new production which is sensitive to demand for the underlying chemicals and compounds being created.
Two of the most common chemicals made using Silver are ethylene oxide and formaldehyde is one of the most important raw materials used in large-scale chemical production such as ethylene glycols which is used as antifreeze, in the production of polyester and polyethylene terephthalate (PET – raw material for plastic bottles), liquid coolants and solvents.
Formaldehyde is used in the production of hoe construction materials, health and personal care products, automobiles, and many other products.
Silvered windows are used to prevent greenhouse effects. This helps to make cars less likely to overheat with exposure to the sun. They coat the glass on cars windows and windshields, also on building windows and glass roofs so that the silver can reflect most of the light (%70), therefore creating an environment that is not overheated.
7. Engine bearings
Silver is used for making specialized bearing such as those used in jet and helicopter engines. High performance engines require strong bearings that can hold up to high temperatures. Simple steel bearings can’t do this. So, by covering steel bearings in silver we can get a heat resistance, a very strong, and a sleek bearing to also act as a lubricant. This, as you can see is very valuable to have. Since the silver bearing is stronger and won’t melt in the engine, this will increase the miles, the distance, and the functionality of the engine on your jet or helicopter. This is why silver bearings are used.
Silver is very widely used when trying to fight bacteria. It is sprayed on and used in lots of things including handles, equipment, bandages, medicine, and many more. Silver can be found in lots of medicines because of its ability to fight bacteria. Although silver can be used in lots of hardware it is also very helpful when keeping people healthy.
Back when people didn’t know too much about silver and its benefits they still did realize all the things that happened when it was used to treat things. After these findings silver became very widely used. Sailers even dropped silver coins into the ocean to keep the water from infecting people on board.
9. Water Purification
Silver is probably one of your best choices when making water pipes. It’s amazing ability to clear water makes it such a great choice because the silver would be cleaning your water while it runs through the pipes. This can take away the fear of bacteria buildups, rusting, and maybe even will clean any bad water that might happen to get into your pipes.
Silver is not only used for water pipes, but water purification itself since it can kill any bad or pathogenic bacteria that could cause the person drinking the water any harm. As you can see, this is very useful. In the future, water pipes and water purification could be used with silver globally! Silver, having the skill of water purification is also used in pools, spas, and other things alike.
We are investors...so when we look into a security we want to know everything. There is a lot of hype growing around Silver. We wrote another piece this weekend on the "Silver Short Squeeze". Google searches for this phrase just passed that of Gamestop and AMC this weekend. These movements seem to build on themselves with price action leading to more investors pilling in hoping for a lottery ticket. But if all we have to go on is a Google Trend and #SilverSqueeze going viral on Twitter...then we would not feel comfortable taking a material position.
That's why we provided this analysis on the industrial uses of Silver. We had already done the homework more than a year ago. It didn't take much effort to update, but given all the commotion we thought you might find it helpful. In our view...the fundamental demand for silver in industrial uses is bullish for the metal. Solar panel and EVs were some of the best performing ETFs of 2020. Many of these securities seem expensive, but even if EV and solar stocks go down their demand for silver should only go up from here.