A rise in photovoltaic demand should improve silver’s supply/demand fundamental picture in the coming years, said BMO Capital Markets.

Analysts described silver as a “frustrating commodity” for investors lately, with prospects for outperformance that do not yield results. In a report late Thursday, the bank said it sees the gold/silver ratio eventually falling to 60, which would mean outperformance by silver, from the current level of around 78. The ratio measures how many ounces of silver can be bought with an ounce of gold.

“In our view, one of the ongoing challenges for silver is the longer-term trend of industrial demand decline, which is in marked contrast to other major metals,” BMO said. “However, as the demand void from photography is replaced by a surge in photovoltaics over the coming years, we see a brighter future for silver fundamentals over the coming years.”

The one area in which silver demand was especially hard hit since the turn of the century was photography, BMO noted. With the move toward digital cameras, photographs are now “just a memory,” BMO said.  This has taken away 180 million ounces of silver demand since 2000, equivalent to 17% of the current market size, the Canadian bank said.

However, as photography-related demand fell, silver’s use in electrodes for photovoltaic  (PV) cells doubled since 2014, BMO said. This occurred despite ongoing thrifting of silver as technology developed. PV demand fell in the first quarter of 2018, but BMO cited energy-industry reports predicting an increase in future solar installations. BMO said it sees PV silver demand doubling to around 200 million ounces annually by 2025.

Meanwhile, BMO said, “mine supply continues to struggle.” The bank projects a third straight decline in silver-mine output in 2018, which will leave this supply 10% below the peak in 2015.

“Silver cannot escape gold’s hold,” BMO said. “Given the macro-driven nature of precious-metals investment demand, we do not think silver can decouple from gold over the coming years. It can, however, outperform as photovoltaics become a significant demand driver.”