Silver Demand: Japan Adding "5 Nuclear Reactors" of Solar Panels in 2013

After Fukushima disaster, Japan is switching to solar energy, with silver a key component...
 
JAPAN is greatly expanding its solar energy capacity in 2013, according to a leading commodities analyst, buoying industrial demand for silver.
 
"Looking at demand for solar panels," writes Nic Brown, senior analyst for French investment bank and bullion dealer Natixis, "Japan is this year expected to install the equivalent of five nuclear reactors."
 
Solar panels are now a major source of silver demand, accounting for 4.5% of total silver purchases in 2012.
 
It takes 80 tons of silver to produce 1 gigawatt of solar energy. The Silver Institute forecasts 3,000 tonnes of silver will be used in the manufacture of solar panels and other photo-voltaic cells in 2015.
 
By the end of 2012, Japanese solar capacity stood at around 7.4 gigawatts. It is expected to double this year, according to Natixis' report, Commodities Weekly.
 
"Renewable energy currently accounts for 10% of Japan’s total energy consumption, most of which is generated by hydroelectric plants," Natixis explains.
 
In the next five years, and as a result of the Fukushima earthquake and nuclear plant disaster in 2011, the government plans to invest as much as ¥50 billion directly into clean energy projects , according to Takahisa Nakagawa, a director at Japan Renewable Energy.
 
These investments and loans will amount to about 1,000 megawatts of clean energy, he says. Government policy also sparked the solar panel boom. Last year it guaranteed substantial payments for anyone selling renewable energy, including solar panel users, through so-called 'feed in tariffs'.
 
Japan is set to overtake Germany as the world’s largest solar market, Bloomberg New Energy Finance said last month. 

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Celine Zoetelief-Tromp is working as a research assistant at BullionVault, the No.1 gold and silver ownership service for private investors.

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