Solar panels and the price of silver – FREE TO READ

The silver price has risen to levels last seen in 2011, driven by the EV and solar power industries – but the higher the silver price gets, the more pressure there is to switch to alternatives such as copper metallization in solar cells. The silver price has doubled since 2019 levels, with a +50% jump in 2020 which never reverted, followed by a second 50% gradual increase since early 2024.

This moment in particular is a good one to observe the impact of the solar industry on the price of silver since a Chinese power market reform is pushing a rush to install solar ahead of June 1st – any shortage-based factor in the price of silver paste is liable to be exaggerated in the next couple of months. In the longer-term backdrop is the rapid growth of the entire solar industry in recent years, and the near-complete adoption of N-type technology, which has double the usage rate of silver per Watt compared to Mono PERC.

According to China Photovoltaic Industry Association (CPIA) statistics, world photovoltaic silver paste consumption was 3,478 tons, of which 3,174 tons was used inside China (worth $2.5 billion) in 2021 – figures which more than doubled by 2024.

The exact usage rates are little-reported, but according to our research on the topic one year ago, the old 9 milligrams per Watt (mg/W) for Mono PERC, 22 mg/W heterojunction, and 13 mg/W TOPCon had each fallen by one-third in leading research efforts, meaning the industry could operate as low as 10 mg/W today if silver became expensive enough to justify the outlay of more efficient processes. With global solar demand now north of 600 GW, the solar industry’s silver paste demand would be somewhere in the realm of 6,000 tons.

To identify some more specific figures, we find 6,577 tons of photovoltaic silver demand ion 2024 (reported by the Silver Institute), while Chinese authorities report 675 GW of wafer manufacturing, which appears to indicate that our old estimate has panned out in the course of 2024 – 10 tons of silver for each GW of solar panels manufactured.

In December Risen Energy announced that it could reduce the silver consumption of its heterojunction from 6 mg/W to just 0.5 mg/W, by switching from silver paste to copper paste whole. But this is years away from typifying the operations of that technologically cutting-edge company, let alone the industry as a whole.

Silver mining expansions have lead times between 5 and 8 years, and 72% of silver mining occurs as a byproduct alongside other minerals – so only 28% of silver mining is directly responsive to the silver price specifically. That means that silver recycling growth, and reductions in usage rates, are the main ways for the industry to address the growing shortage.

This moderate shortage and elevated silver price will last for a long time. While the solar industry will no longer grow at a rapid rate from its current scale, and might even shrink slightly next year, silver’s usage rate won’t easily be reduced per Watt. It is silver paste which explains the dominance of TOPCon versus heterojunction and Back-Contact cell types – the latter two have high rates of silver usage and heterojunction also requires low-temperature silver paste.

So if ever the silver price should threaten to fall, that would reduce the price disadvantage of these technologies, boosting their prevalence in the solar industry – and thus they are a source of latent demand. At present, TOPCon is well over 85% of Chinese manufacturing.

Silver paste is between 60% and 80% silver content in the general electronics industry, rising to 90% in the case of photovoltaics – so most of its mass, and cost, is simply silver itself. And over 85% of silver paste demand is from the solar industry, with the solar industry accounting for 19% of all worldwide silver metal demand in 2024, according to the Silver Institute.

The recycling price of silver paste is between $413 and $1100 per kilogram, currently $680 in the case of photovoltaic silver paste, according to Chinese industry news.

Since the silver recycling price is determined by the silver content level of the paste and by the content of the impurities which must be removed, resulting in a price of only $186 per kilogram in the case of 50%-silver content paste from the printing industry, which implies there is no value to be extracted at all from 35% silver content paste – and of course it depends on what the impurities are.

Another major silver demand source is electric vehicles, but this deserves its own article in a future issue.

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