High Silver Prices Push Solar Manufacturers to Reduce Metal Use

Silver has been one of the major commodity beneficiaries of the global solar expansion, but the relationship between the precious metal and photovoltaic manufacturing is beginning to change.

Solar panel manufacturers are increasingly reducing the amount of silver used in their products as elevated prices add pressure to already narrow manufacturing margins. According to BloombergNEF estimates reported by Bloomberg, global silver demand from the solar industry is expected to decline in 2026 for a second consecutive year.

The decline does not indicate a contraction in solar deployment. Instead, it reflects rapid improvements in manufacturing efficiency, efforts to use thinner quantities of silver paste, and increasing substitution with cheaper metals such as copper.

Silver plays an important role in crystalline silicon photovoltaic cells because of its high electrical conductivity. Silver-containing pastes are printed onto cells to create electrical contacts that collect and transport the current generated when sunlight reaches the semiconductor material.

Historically, the quantity of silver contained in an individual panel has steadily declined as cell manufacturers improved printing techniques and electrode designs. The sharp increase in silver prices has now strengthened the economic incentive to accelerate that process.

BloombergNEF data cited by Bloomberg indicates that silver currently represents roughly one-fifth of the production cost of a solar module. While that proportion has fallen from the levels reached during the metal's price spike in January, it remains substantially above the 3% to 5% range seen before 2024. Silver prices rose almost 150% during 2025, according to the report.

The increase is particularly significant for manufacturers operating in China, which dominates global solar cell and module production. Persistent manufacturing overcapacity has contributed to intense price competition across the Chinese photovoltaic supply chain, reducing margins and forcing some smaller producers out of the market.

Under those conditions, reducing silver consumption has become an important way for manufacturers to control costs without substantially changing module performance.

Solar Silver Demand is Already Falling

Data from the Silver Institute provides further evidence of the transition.

Photovoltaic silver demand declined approximately 6% in 2025 to 186.6 million ounces, down from 197.5 million ounces in 2024. Metals Focus, which produces the World Silver Survey for the Silver Institute, expects demand from the sector to fall another 19% in 2026 to approximately 151 million ounces.

The decline is notable because global solar installations are still increasing. It means reductions in the amount of silver required for every watt of solar manufacturing are occurring quickly enough to outweigh additional demand created by higher cell production.

The trend is also affecting the broader industrial silver market. Industrial demand fell 3% to 657.4 million ounces in 2025 after four consecutive years of growth. For 2026, industrial fabrication is expected to decline again as lower photovoltaic consumption offsets growth from areas including artificial intelligence infrastructure, data centers, electric vehicles and electricity networks.

Solar therefore illustrates how commodity demand associated with the energy transition can change even while deployment of the underlying clean technology continues to grow.

Manufacturers Accelerate Silver Thrifting

The industry's first response has been "thrifting", reducing the amount of silver required by each solar cell rather than eliminating the material.

Manufacturers are refining metallization pastes, using finer printing techniques and redesigning the conductive lines that carry electricity across cells.

According to the World Silver Survey 2026, silver represented around 8% to 10% of solar cell production costs at the beginning of 2025 before rising to more than 20% as metal prices increased. The cost pressure has accelerated several technologies designed to reduce silver intensity.

One approach involves silver-coated copper pastes, where copper provides most of the conductive material while a smaller amount of silver preserves performance. By the fourth quarter of 2025, pastes containing only about 10% silver had entered high-volume production, according to the survey.

Solar manufacturers are also deploying zero-busbar designs and increasingly precise printing technologies. These approaches can reduce silver consumption by another 10% to 20% compared with some conventional cell configurations.

The industry is ultimately moving toward deeper substitution.

Copper electroplating and copper-based pastes have the potential to remove much of the silver required for photovoltaic metallization. Copper is considerably cheaper than silver, making substitution increasingly attractive when precious-metal prices are high.

However, technical challenges involving oxidation, adhesion, manufacturing yields, and long-term reliability mean fully silver-free cells are not yet the dominant solution. The Silver Institute expects improvements in silver-copper technologies to reduce average silver loadings in mainstream photovoltaic cells to below 5 milligrams per watt by 2027.

Implications for Solar Costs and Material Demand

Reducing silver intensity could help protect one of solar energy's most important competitive advantages: falling technology costs.

Research and industry analysis increasingly identify silver as one of the key material constraints facing conventional crystalline silicon photovoltaic manufacturing. As panel prices fall, relatively small quantities of expensive materials can represent a growing proportion of total manufacturing costs.

The current transition therefore has implications beyond the silver market.

For solar manufacturers, successful substitution can reduce exposure to volatile commodity prices and improve margins. For project developers and electricity buyers, lower material intensity can help limit the extent to which commodity price shocks translate into higher module prices.

For miners and commodity investors, however, the development illustrates the difficulty of projecting long-term material demand solely from renewable energy deployment forecasts. Rapid technological innovation can significantly reduce the quantity of a commodity required for each unit of clean energy capacity.

The silver market nevertheless remains tight. The Silver Institute expects total supply to increase by around 1.5% in 2026 to approximately 1.05 billion ounces, while forecasting a sixth consecutive annual market deficit of about 67 million ounces. Investment demand and consumption from sectors including electronics, vehicles, grids and data centers continue to support the market even as photovoltaic demand weakens.

Silver is also unlikely to disappear from solar manufacturing in the immediate future. Its conductivity, reliability and established manufacturing performance continue to make it valuable in high-efficiency cells and applications where durability is particularly important.

The more significant change is how efficiently the solar industry uses it.

After years in which expanding photovoltaic manufacturing became an increasingly important source of global silver demand, high prices are accelerating technological changes that allow solar production and silver consumption to move in different directions. Solar deployment can continue growing while the amount of silver required by the sector declines, potentially easing one material constraint on the next phase of renewable energy expansion.

Source: www.bloomberg.com