(Kitco News) - The growing energy crisis due to the ongoing war in Iran is driving renewed interest in alternative energy, including solar power, which should provide some support for silver this year. However, one bank notes that shifting momentum in a key solar power market could limit the segment's overall impact on the precious metal.
For the last few years, the solar sector has been one of the biggest sources of industrial demand for silver, but commodity analysts at BMO Capital Markets said that higher prices have impacted the market, even as nations continue to diversify their energy needs.
In a note on Monday, analysts wrote that the evolving market in China could overshadow global energy diversification trends.
“Cleantech continues to be the mot du jour in the wake of the Iran war, with strong NEV sales and dealership traffic a key talking point in the past month. However, one talking point which continues to go under-discussed is the concerning outlook for solar capacity additions, with Chinese solar capacity additions year to date tracking below 2024 levels,” the analysts said in the report.
