High Silver Prices Force PV Industry to Cut Silver Usage, Solar Demand Declines for Second Consecutive Year
nashnova research
Silver prices have surged nearly 150% over two years, forcing the solar industry — silver's single largest demand source — to accelerate silver reduction and substitution. JPMorgan expects solar silver demand to drop ~30% this year, enough to tip the silver market back toward balance after five consecutive years of deficit.
How badly is the silver rally hurting solar manufacturers?
Silver now accounts for roughly one-fifth of a solar module's production cost, up from just 3%–5% before 2024. This means → silver has gone from a minor input to the single largest material cost, directly eating into margins.
BloombergNEF estimates global solar silver demand will decline for a second straight year in 2026, as high prices accelerate the industry's push to cut usage.
JPMorgan projects solar silver demand will fall ~30% this year — roughly 60 million fewer ounces. In plain terms = solar, silver's biggest buyer, is purchasing nearly a third less in a single year.
How are manufacturers cutting silver — and what are the technical paths?
Three main approaches: thinner silver lines on each cell (less silver per wafer), silver-coated copper paste replacing pure silver paste (cheaper metal as the base), and new cell architectures that eliminate thick silver busbars entirely.
Some companies are targeting zero silver outright: LONGi Green Energy, China's largest solar firm, said last month it has begun mass-producing copper-based cells; Canadian Solar has launched its own zero-silver R&D program.
Elvis Chou, consultant at Metals Focus, put it bluntly: "High prices ultimately kill high prices. Reduction and substitution are happening and will not stop."
Can copper fully replace silver? Where are the barriers?
Copper is the most discussed substitute, but two hard problems remain: copper oxidizes quickly, reducing conductivity; and in high-temperature manufacturing, copper can diffuse into the silicon, creating defects that undermine long-term reliability.
Fixing these issues requires costly process changes — an extra burden for module makers whose margins are already razor-thin. This means → copper substitution is not a simple swap; technical barriers cap how far demand can shift.
Silver-paste supplier DK Electronic Materials (无锡帝科) said a move to copper paste would "ease the high cash-flow pressure on paste makers and improve profitability," while reducing silver dependency.
At what silver price does large-scale substitution kick in?
Metals Focus' Elvis Chou identifies key price anchors: if silver stays above $68 per ounce, silver-free production becomes economically superior to current methods; at $80–100, the pressure to switch to copper becomes irresistible for most manufacturers.
Silver currently trades at roughly $69 per ounce — already on that threshold. In plain terms = the current price itself is the strongest catalyst for substitution.
What does this mean for the silver market — does the bull case still hold?
JPMorgan estimates the drop in solar silver demand is large enough to push the silver market (excluding inventories and ETF flows) back toward supply-demand balance after five straight years of deficit. This reflects something bigger than an industry adjustment — solar de-silvering is rewriting the entire silver supply-demand narrative.
The solar industry itself is also consolidating hard: BloombergNEF data show 2026 global solar installations are expected to decline for the first time on record, after China's prolonged price war crushed margins and forced out weaker players.
Whether solar silver demand can find a new floor under the twin pressures of technological substitution and falling installations will be the key test for the silver bull thesis going forward.
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