10 Feb 2014 Last updated at 07:18:21 GMT

Silver demand from India's gigantic solar plant to exceed 20 million ounces a year

Silver demand from India's gigantic solar plant to exceed 20 million ounces a year

MUMBAI (Scrap Monster): India is about to build the world’s largest solar plant in the northern state of Rajastan. The 4,000 megawatt capacity plant is expected to raise the silver demand in the country substantially. The annual silver demand from the plant is estimated at nearly 20 million ounces per year. In other words, the silver demand from photovoltaic (PV) cells will jump by nearly 40% from the 50 million ounces recorded in 2013.

According to estimates, the proposed solar plant will occupy 77 square kilometers of land that has already been earmarked near Sambhar Salt Lake. The cost of the project is estimated to be around $4.4 billion. A consortium of six state-owned energy companies is in charge of the construction activities. The estimated life of the plant is around 25 years.

Earlier, the Indian government had unveiled a plan to transform the country into a global leader in solar energy over the next three decades. The plan proposes massive expansion in installed solar capacity. India aims to upgrade the installed capacity of solar power from the current capacity of nearly 2.5 GW to 20 GW by 2020.

India’s plans to make big investments in solar power panels may take the silver photovoltaic (PV) demand to record new heights. The big push in silver demand is expected to drive the grey metal prices to substantially higher levels in the years to come. The future of PV demand lies in emerging countries in the East such as China and India. Japan is also poised to make big leaps forward in use of solar energy, which in turn may accelerate demand growth and push silver prices higher.

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