The gold and silver prices were rallying in the session until a midday sell-off knocked them both back lower.
The gold futures are currently down $29 to $4,054.
And silver is now down 71 cents to $50.14.
When I was doing the research for this year’s Silver Report (if you have not read it yet, I like to think it’s even more beneficial to do so now given what we just experienced over the past month and a half), most of the solar projections at the end of last year were calling for continued growth, albeit at a slower pace.
Yet when Ember released their mid-year update, their data showed that solar was growing well beyond the earlier expectations at 64%.
This growth was spurred in part by developers racing to complete projects before new rules on wind and solar compensation came into effect in June this year.
While this may lead to a slowdown in the second half of the year, new clean power procurement requirements for industry and higher full-year deployment expectations from China’s solar PV association (CPIA) suggest that 2025 will surpass 2024’s record high installations.
Yet in the mid-year update that the Silver Institute released last week, with data compiled by Metals Focus, they were forecasting a decrease in the amount of silver consumed in solar panels in 2025.
In photovoltaics (PV), global installations are set for a new record high. However, due to a sharp drop in the amount of silver used in each module, PV silver demand is forecast to ease by around 5% y/y.
This outcome will be partially offset by healthy gains in the AI market for data centers, and further growth in electric vehicle sales (albeit more modest than previously expected).
So, how does that make sense?
The key difference is that, especially with the silver price rising, solar manufacturers have placed an even greater emphasis on thrifting, aka using less silver in each panel.
To illustrate, a key advancement in material innovation is the development of copper-cored silver paste, which has seen a rapid evolution since the introduction of HJT (Heterojunction) PV cells in late 2022. Beginning with Ag-Cu fine-line paste, containing over 50% silver in Q2.23, HJT cell manufacturers have progressed to 15% silver formulations by Q2.25, followed by 10% silver products entering production in Q3.25.
TOPCon cell manufacturers are also validating composite structures that combine a high-temperature silver seed layer (80% Ag) with a low-temperature Ag-Cu layer (30% Ag), aiming to reduce silver loadings while maintaining cell efficiency. Compared to HJT cells (with a market share of only around 3%), TOPCon is a far more established technology for modular production, accounting for nearly 80% of global PV manufacturing in 2024.
The transition from 2BB (two busbar) to MBB (multi-busbar) and SMBB (super multi-busbar) has enabled narrower line widths, lowering silver usage. By late 2024, 0BB (busbar-less) technology had been widely implemented, delivering 10–20% silver reductions. When combined with ultra-fine line printing methods—such as laser pattern transfer, stencil printing, and fine-mesh screen printing—line widths can be shrunk even further, cutting silver demand by an additional 10–15%.
Process optimisation has also played a role in this strategy, notably through Laser Selective Emitter (SE) technology. By creating localised, high-concentration doping areas, SE reduces electrode contact resistance, lowers silver paste consumption, and enhances conversion efficiency, making it a key enabler of cost-effective, high-performance solar cell production.
Meanwhile, silver-free metallisation technologies are progressing relatively quickly, particularly in HJT cells. Pure copper paste is also under development for TOPCon and X-BC cells (with BC now achieving around a 12% market share). For TOPCon, the “silver seed layer + pure copper paste” structure remains under review, but it has already proven effective in BC cells.
Some manufacturers have also replaced silver with base metals like copper and nickel in rear electrodes, and are in the process of removing silver from the cell’s reverse side. Collectively, these strategies are projected to cut silver consumption per watt by around 15–20% this year.
This is something I’ve been hearing from multiple industry sources, and I do believe it is taking place. I’m somewhat confused as to why the a big panic now when silver went from $40 to $50, and not as much concern earlier. But perhaps the manufacturers were plenty worried about it earlier, and I’m just hearing more about it now.
I understand that manufacturers are always trying to bring down costs. Although I see estimates that around 20 grams of silver are used per panel, and while I know that there are many types of panels that use different amounts, it doesn’t seem like a $10 move in silver would necessarily be blowing out their cost structure.
Yet my confusion aside, I’ve talked with enough independent sources at this point to believe that they are putting a lot of effort into thrifting. A sentiment that was mentioned in a recent Bloomberg article as well.
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.
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 silver’s volatile prices in the near-term, they added.
BMO Capital Markets also offered a similar comment.
Commodity analysts at BMO Capital Markets said the solar power sector will continue to play a dominant role in the silver market as global demand for cheap renewable energy continues to grow. Silver is a key component in photovoltaic solar panels.
“Our analysis suggests that this will keep silver in deficit for the foreseeable future, with the market balanced by flows from the investor space to the industrial space.”
According to BMO estimates, the solar sector is expected to consume 246 million ounces of silver, an increase of 5.5% from 2024. Next year, solar-sector silver demand is expected to peak at 261 million ounces.
The growing solar power sector has completely transformed the silver market. Ten years ago, only 54 million ounces of the precious metal were used in solar panels.
BMO said that the biggest risk for silver demand in the solar sector is the potential for further thrifting.
A recent report by Metals Focus, which compiles the data for the Silver Institute, noted the following:
Soaring metal prices have also weighed on industrial activity. In the photovoltaic (PV) sector, for example, elevated silver prices have created significant cost pressure, prompting manufacturers to accelerate thrifting and substitution.
Physical investment is set to fall (-4%) for the third consecutive year, reaching its lowest level since 2018. This year’s decline is entirely due to exceptionally weak US demand. Despite a recent uptick, US net investment is still expected to more than halve in 2025, driven by a surge in liquidations and weak fresh purchases through to September.
Excluding the US, global physical investment is projected to rise by 11%, as silver’s exceptional price gains have rekindled investor interest, particularly in India.
I’m surprised that retail selling in the U.S. has continued for as long as it has. This has been going on for a couple of years now, and despite some brief reprieves, for the most part, it hasn’t stopped. Which in some ways makes it all the more incredible to see what the price has done at the same time that the largest investment customer has been selling.
Yet fear not, silver investors, because even despite that, Metals Focus is still expecting another sizable deficit, which is even larger if you account for the silver ETFs (which they refer to here as the silver ETPs).
Although this year’s shortfall will be smaller than in previous years, it will continue to erode above-ground stocks, tightening physical market conditions. More importantly, this ongoing deficit coincides with a notable rise in silver investment.
Silver ETPs, for example, are on track for the second-largest annual increase in 2025. In fact, when changes in ETP holdings are included, the market balance points to the deepest supply shortfall on record.
Looking ahead, we expect most of the macroeconomic and geopolitical factors underpinning the broader rally in precious metals to remain in place over the next 12 months or so. Meanwhile, silver’s supply–demand fundamentals should continue to provide price support. While we recognise that high prices have weighed on some areas of silver fabrication, in some applications this will take time to translate into materially weaker demand. Coupled with a projected recovery in silver bar and coin sales, this will keep the silver market in deficit through 2026.
That’s why despite not knowing what the silver price will do in the next day or week, when I think out 5-10 years, and consider the possibility that at some point that the retail market also turns into a net buyer, it still seems like we’ll be a lot more likely to be looking at a higher silver price than a lower one.
Sincerely,
Chris Marcus
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