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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