Global solar manufacturers, recognized as the largest industrial consumers of silver, are poised to decrease their utilization of this precious metal for the first time in several years, in light of a significant surge in its price.
According to analysts, the demand for silver in solar modules installed this year is projected to decline to 194 million troy ounces, equivalent to 6,028 metric tons. This represents a decrease of 7% compared to the previous year.
The utilization of the precious metal in solar modules, which constitutes 17% of the overall silver demand, has experienced an annual increase since 2019, as reported by the industry association The Silver Institute. In the current year, prices have experienced a remarkable surge of 46%, reaching unprecedented levels. This increase follows the trajectory of gold, as global economic uncertainty and trade tariffs have significantly heightened demand for safe-haven assets. According to reports, silver currently constitutes 14% of the costs associated with solar module production, a notable increase from the 5% recorded in 2023.
According to analysts, the rising prices of silver are “exacerbating cost pressures on solar manufacturers already facing fierce competition and low market prices.” While certain solar manufacturers are intensifying their research efforts on alternative materials like copper, the pace of progress remains sluggish. Consequently, the industry is likely to continue facing exposure to the volatile prices of silver in the short term, they noted.