Silver's Future Under Trump: Resilience against US Energy Transition Policy

For silver markets, one of the most important long-term demand growth themes has been the global energy transition – the shift from finite fossil fuels to cleaner and limitless renewable energy. That’s because silver is critical for the production of key products linked to a decarbonising economy such as solar panels, wind turbines and electric vehicles, among others.

Former US President Joe Biden oversaw the passing of the Inflation Reduction Act in August 2022, which among other things included sweeping support measures for clean energy technologies and a goal to reduce America’s carbon emissions by around 40% by 2030.

However, US President Donald Trump has been famously supportive of traditional industries such as coal, gas and oil, while expressing much less enthusiasm for clean energy, as well as signing an executive order that would withdraw America from the Paris Agreement on climate change.

Could this apparent stalling of the energy transition in America bode ill for silver demand?

Undoubtedly, the size of America’s economy makes the country significant for almost every commodity. In that context, a slowing down of US support for clean energy could certainly take a chunk out of industrial demand for silver. And what happens in America can greatly influence other nations too.

However, the question warrants a closer look at what President Trump’s position on energy and climate really means for silver demand.

Why silver matters for the energy transition

Silver is an important asset which plays a dual role as a precious and industrial metal. While silver’s scarcity, resistance to corrosion and shiny appearance put it alongside gold as a precious metal, its highly conductive and ductile properties make it a valuable metal in electrical circuits and other high-tech applications. This places silver in a key position to benefit from the global energy transition as it finds important applications in the production of photovoltaic cells for solar panels, wind turbine motors and the advanced circuitry needed for electric vehicles.

Solar PV: For use in solar panels, silver powder is turned into a paste which is applied to a silicon wafer. When light falls on the silicon, electrons are released.  It is also silver that is used to conduct the resulting electricity, which can be transmitted for immediate use or stored in batteries.

Wind power: Silver is also a key metal in the production of wind turbines. Specifically, silver’s extremely efficient conductivity makes it an ideal material to use in the brushes needed to transfer electrical current between a rotating generator and a fixed external power supply. While copper can also be used for this purpose, it has a lifetime of about one to two years, compared with silver which can last around three to five years. This can be important when industrial machinery is exposed to extreme marine environments that are the norm for offshore wind arrays. Silver can therefore extend wind turbines’ operational periods, reducing maintenance costs.

Electric vehicles: Silver’s excellent conductivity and ductility make it a valuable metal in the production of electric vehicles due to the need for strong but lightweight electrical connections. Its uses include conductive pastes in automotive glass, circuit-breakers and fuses, as well as switches and relays in electric circuits. Other uses include automatic braking and airbag deployment systems, as well as touchscreen and navigation systems, not to mention external supporting infrastructure such as electric charging stations.

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Industrial growth in silver demand

Silver’s importance for industrial applications is highlighted by its rising share of total silver demand, which increased to 58.5% in 2024 (680.5 million ounces), from a 54.8% share in 2023 (657.1 million ounces), according to an April 2024 analysis by industry group, the Silver Institute.

America is the world’s top consumer of silver, making any policy shifts there potentially significant for demand, and therefore the price. America consumed an estimated 6,400 tonnes of silver in 2024, or roughly 225.8 million ounces. That puts America’s share of global demand (1,164.1 million ounces) at about 19.4%.

If 58.5% of America’s consumption of silver came from the industrial sectors, this could be estimated at 132 million ounces. Of this, a smaller fraction would be consumed in the sectors considered part of the energy transition such as solar panels, electric vehicles and wind energy. When compared with the global total, America’s share of silver demand potentially at risk begins to look relatively small.

An unstoppable transition

In addition, the demand numbers alone don’t tell the full story. Even a total lack of enthusiasm by one US administration towards climate action would not be enough to stop the global transition to clean, limitless energy. This is significant for silver.

In the US, individual states have considerable power to set policy direction, so even a cooling of interest at the national level is unlikely to derail America’s shift to clean energy.

US states with more than 50% of their electricity coming from renewables include Vermont, South Dakota, Washington, Idaho, Oregon, Iowa, Maine and Montana. And as a country,  America’s share of total electricity generation coming from renewables equaled that of nuclear energy output for the first time in 2020 and surpassed the electricity generated by coal in 2022, according to the US Energy Information Administration. The next milestone would be for renewables to surpass the energy generated by natural gas, although it would need to almost double in size from 2022 levels to achieve that target.

A shift to the east

When considering the impact on total global silver demand, an important point is that in recent years, the global production of clean technology has shifted from western countries to the emerging economies such as China, making America less significant for the global energy transition than it was a decade ago.

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In addition, the falling cost of renewable energy means it is likely to continue gaining market share from fossil fuels on cost alone, irrespective of energy and climate policy.

Renewables’ share of the global electricity mix is forecast to grow to nearly 50% by 2030, up from around 30% today, with three times as much investment going into new offshore wind projects than into new coal- and gas-fired power plants by that date, according to the Paris-based International Energy Agency.

Clean energy is a necessity, not a green luxury

Fossil fuels have been a tremendous source of power – rich, energy-dense, and reliable – so, they will be with us for some time yet. But they also come with major drawbacks:

• Finite supply: The easy-to-reach fossil reserves are becoming more scarce, making extraction more difficult and more expensive.
• Air pollution: Fossil fuels foul the air in cities,  along major roads,  other transport routes,  airports as well as energy and industrial sites.
• Climate change: The combustion of coal, oil and gas releases CO₂, leading to more extreme heatwaves, droughts, floods, sea-level increases and species extinction.
• Energy insecurity: Fossil fuels in some cases perpetuate dependency on energy from foreign regimes, some of which may be considered less than friendly.
• Habitat destruction: Some fossil fuel extraction methods can contaminate land and water, contributing to environmental degradation.

Moreover, fossil fuels are also capital-intensive and the number of people employed to produce them is set to decline as renewables take over. In 2023, for every US job lost in coal, three new jobs opened in solar power.

The same trend is clear at the global level. The number of workers in renewable energy worldwide overtook those employed in fossil fuels in 2021 and the gap has increased since then, according to the International Energy Agency.

The need to transition away from fossil fuels is not driven by concerns over their supply running out. It is driven by the finite capacity of the Earth’s atmosphere to hold more CO₂ without triggering severe climate instability. This is known as the “carbon budget”.

Throw into the mix the need to develop domestic clean energy to improve energy independence as well as boost home-grown jobs and clean up the air in cities and we have a compelling set of arguments for an orderly transition to unlimited clean energy.

Energy transition forces go beyond politics

These are long-term trends driven by technological progress, business innovation, economics, the drive for energy efficiency, the need for energy security, the need for better air quality in cities and the imperative to deal with climate change as an existential threat.

As the physical impacts of climate change intensify, so will the urgency to decarbonise energy, transportation and industry by investing in clean and limitless sources of power. Complementing this effort, there will also be a need to deploy carbon-capture technology and nature-based carbon sinks (such as forests and other biomass programmes) that can draw down the atmospheric CO₂ concentration by absorbing or trapping and storing the gas.

To summarise, a slowing down of the energy transition in America can impact the country’s silver demand and the size of the US economy means the impact should not be underestimated. That said, the forces shaping the energy transition are too powerful and too global to be undermined by policies emanating from the White House.

Certainly, the emerging global trade war that started in April due to US tariffs on imports could slow economic growth more broadly, denting industrial demand for silver worldwide.

However, the market fundamentals for silver remain quite bullish as the market has seen a global structural supply deficit for four consecutive years. Total global supply of silver in 2024 stood at 1,015 million ounces, while total global demand eclipsed this figure at 1,164 million ounces, according to the Silver Institute. Other things being equal, this suggests silver prices are likely to remain buoyant in future as supply falls short of demand.

Shift to copper

One factor that could weigh against the seemingly unstoppable need for silver in photovoltaics is its substitution with copper. Copper is almost as efficient a conductor of electricity as silver but its price is around 100 times lower, making it an obvious way to reduce the overall costs of solar panel production. While more prone to oxidation than silver, researchers are exploring ways to use copper and extend its life in photovoltaics. While this could act as a limiting factor on the use of silver in solar power, it could also drive the cost of solar panels even lower, further accelerating one part of the global transition to clean energy.

A broad-based need for silver

In addition, other growth industries are also set to drive demand for silver that are separate from the energy transition such as computer networks, consumer electronics, medicine and healthcare, mirrors and optics, aerospace and defence, water purification, nuclear power and artificial intelligence systems, to name just a few.

This broad base of support suggests the future is bright for silver as the metal plays such a crucial role in a wide range of technologies, of which clean energy is only one. When put in a global context, President Trump’s scepticism over the energy transition is more of a minor bump in the road for industrial silver demand than a major roadblock.

To find out more about the outlook for silver prices in 2025, read Kinesis’ Investor’s Guide to Silver in 2025

To learn about Kinesis silver (KAG), see our page here.

Frank’s experience covering the commodities markets spans 22 years, with a particular specialism in metals, carbon and energy markets. He has worked as a senior editor for S&P Global Commodity Insights (formerly Platts) and before this, at ICIS-LOR, a part of Reed Business Information (Reed Elsevier), where he covered the petrochemicals markets from 2003 to 2005.

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