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Global solar manufacturers, the largest industrial consumers of silver, are set to reduce use of the precious metal for the first time in years amid a scorching rally in its price.
Silver demand for solar modules installed this year may drop to 194 million troy ounces, or 6,028 metric tons, down 7% from last year, BNEF analysts led by Yali Jiang wrote in a note.
Consumption of the precious metal in solar modules — which accounts for 17% of total silver demand — has risen every year since 2019, according to industry association The Silver Institute.
Yet this year, prices have surged 46% to record levels, following gold as global economic uncertainty and trade tariffs have boosted haven demand. Silver now accounts for 14% of solar module production costs, up from 5% in 2023, according to BNEF.
Surging silver prices are “exacerbating cost pressures on solar manufacturers already facing fierce competition and low market prices,” said the analysts.
While some solar manufacturers are accelerating research on alternative materials such as copper, progress is slow and the industry will remain exposed to the silver’s volatile prices in the near term, they added.
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