Solar panel manufacturers are in a rush to reduce their use of silver due to a dramatic spike in prices. Over the past year, silver prices have skyrocketed by 300%, leading to shortages in the supply chain for this crucial industrial metal.
The photovoltaic sector, which uses more than 25% of industrial silver, is actively seeking alternatives. Silver is valued for its excellent reflectivity and conductivity, making it essential in the production of solar panels.
Recently, both gold and silver have reached record prices, partly driven by concerns over U.S. military actions in various global conflict zones. Just last week, silver prices exceeded $100 per ounce, now standing at approximately $112. Retail investment demand has surged, contributing to a notable 60% price increase since the beginning of 2026.
While gold is primarily used for investment and jewelry, silver plays a significant role in various industries—more than half of its demand originates from industrial applications. The rising costs have impacted several sectors beyond solar, including electronics, automotive batteries, and medical devices. As manufacturers try to lower their silver consumption—a process known as “thrifting”—the solar industry faces significant challenges.
Philip Newman, director at Metals Focus, expressed concerns about “demand destruction” in the long term. This year, solar usage of silver could potentially decrease by up to 20% due to substitute materials and thrifting methods. Currently, silver constitutes about 26% of the cost for creating solar modules, a sharp increase from just 3% three years ago, according to Jenny Chase, a solar analyst at BloombergNEF.
The steep rise in silver prices has intensified the challenges for Chinese solar producers, who are navigating stiff competition and overproduction issues. Chinese manufacturers typically use more silver in their products compared to their European counterparts, as noted by Christoph Podewils from the European Solar Manufacturing Council. Many are now racing to develop silver-free technologies.
For example, Longi, a prominent Chinese solar panel manufacturer, announced plans to substitute base metals for silver in their solar cells due to rising production costs. Similarly, Trina Solar is working on a new copper-contact solar cell aimed at decreasing silver dependence, as reported by Chen Yifeng, the company’s vice president of technology.
On a smaller scale, Aiko Solar based in Shanghai is already producing solar cells without silver, achieving an installed capacity of 8.57 gigawatts by mid-2025.
Sonia Dunlop, CEO of the Global Solar Council, pointed out that current solar panels already use ten times less silver than those manufactured 20 years ago.
Other industries are not immune to the silver price rise. In October, Samsung Construction and Trading signed a two-year deal with a silver mining company to secure supplies. Even though the amount of silver in vehicles is relatively small compared to other materials, electric cars consume nearly 80% more silver than traditional gasoline models.
Consultant Gerrit Reepmeyer estimated that if silver prices remain elevated, it could lead to an additional cost of $100 for regular vehicles and over $200 for electric vehicles. Former Aston Martin CEO Andy Palmer remarked that rising silver prices add another input cost to manage, rather than posing a significant strategic threat.