Solar industry accelerates shift from silver as costs soar

By Anushree Mukherjee

Feb 19 (Reuters) - Solar ‌panel producers are ​intensifying efforts ​to replace silver with alternatives such as copper after silver rallied 130% over the past year, squeezing margins already under pressure from production overcapacity, ‌particularly in China, industry experts said.

"Silver is the greatest contributor to the ⁠increased cost of manufacturing solar panels," said Derek Schnee, senior commercial solar consultant at JK Renewables, adding ‌that the cost of solar panels ‌has increased 7-15% over the last 12 months.

Silver paste, a key material for photovoltaic panels, makes up 30% of total solar cell costs, Heraeus analysts noted.

After a 147% ​rally in 2025, silver prices touched an all-time high of $121.64 an ounce in January amid tight physical supply and retail-driven buying, before easing to $77 an ounce.

The photovoltaic ⁠sector accounts for 196 million troy ounces, or 17%, of total silver demand, which is also driven by jewellery, electronics, ​and investment uses.

"In the U.S., silver paste costs per 450-watt module have increased from roughly $5.22 in early 2025 to about $17.65 ," said Ben Damiani, ​Chief Technology Officer at renewable power company Cherry ‌Street Energy.

SHIFT TO COPPER GAINS MOMENTUM

With silver fetching $2.5 million per metric ton, solar manufactureres' shift is accelerating towards alternatives such as copper, which ⁠was last trading at $12,823 per ton.

LONGi Green Energy Technology Co Ltd, China's leading solar panels manufacturer, said in January it had made advances in cost-saving technology involving base metals and plans to ⁠begin mass production between April and June.

"Broader industry shifts are expected this year, with leading manufacturers moving ​to pure copper metallisation and hybrid silver-copper pastes," said Marius Mordal Bakke, vice president of solar supply chain research at Rystad Energy.

BILLIONS IN SAVINGS FORECAST

With copper trading at roughly 0.5% of the price ‌of silver, potential for further cost reductions from such switch is massive, he added.

Damiani at Cherry Street Energy estimated switching from silver ‌to copper-based metallisation could represent roughly $15 billion per year in savings for the sector globally at ⁠500 gigawatts of annual solar production.

However, ‌replacing silver is not straightforward, ​with its higher electrical conductivity versus copper, experts said.

(Reporting by Anushree Mukherjee in Bengaluru; additional reporting by Polina Devitt; Editing by Pratima Desai and ‌Andrei Khalip)

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