Soaring silver prices have begun to impact the global solar power industry, particularly the photovoltaic sector. Chinese manufacturers of solar photovoltaic (PV) cells or panels plan to hike prices during the current quarter or cut production.
China dominates global solar panel manufacturing, producing over 80 per cent of the world’s panels, cells, and wafers, controlling nearly the entire supply chain from raw materials (like polysilicon) to finished products, significantly driving down costs and accelerating the global clean energy transition.
SMM (Shanghai Metal Market) News said the sustained rally in spot silver prices has led to an increase in the rates of silver paste used in Tunnel Oxide Passivated Contact (TOPCon) cells. Silver is the primary raw material for this. Over the past few years, the shift to TOPCon cells has increased the demand for silver pace sharply.
Production costs
The production cost of standard solar cells using silicon wafers has increased by at least 0.06 yuan (₹0.77) per watt to 0.33 yuan (₹4.25) over the past three months. The silver paste accounts for 40 per cent of the production cost of these cells and roughly 11-14 per cent of module cost globally.
Spot silver prices have gained one-and-half-times in the past year, zooming to nearly $74 an ounce currently. Silver March futures are quoting at $73.620. In India, spot silver ended the week at ₹2,34,550 a kg. On MCX, March futures ruled at ₹2,41,967 a kg. On the Shanghai Futures Exchange, March futures were 17.080 yuan a kg ($75.93 an ounce).
According to the New York-based The Silver Institute, the white precious metal’s use in PV power is the leading current source of green electricity. Higher-than-expected photovoltaic capacity and faster adoption of new-generation solar cells raised global electrical and electronics demand by 4 per cent in 2024.
Record high usage
This gain reflects silver’s essential and growing use in PV, which recorded a record high of 197.6 million ounces last year. The institute’s World Silver Survey 2025 has estimated a fall of one per cent in demand for silver, which boasts the highest electricity conductivity, from the PV sector to 195.7 million ounces this year.
Demand from the sector has more than doubled over the past five years, coinciding with the physical deficit being witnessed during the same time. The market balance is projected at a deficit of 187.6 million ounces for the seventh year in a row in 2025.
However, in view of soaring prices, the PV sector has undertaken cutting the use of silver paste by various means, such as adopting composite silver powder or thinning the silver layer, per The Silver Institute. The composite powders are a combination of silver-nickel and silver-graphite, but silver-coated copper powder has emerged as the most promising element to cut silver usage.
Pruning demand
The Silver Institute said the silver powder is turned into a paste, which is then loaded onto a silicon wafer. When light strikes the wafer, electrons are released and the silve carries the electricity for immediate use or into storage batteries for later consumption.
The institute said progress has been made in pruning the demand and substitution within the PV sector. This resulted in a sharp drop in silver loadings. “This helps explain why total industrial demand’s growth rate slowed sharply from 11 per cent in 2023 to 4 per cent in 2024,” it said in the Survey.
SMM News said the PV sector is being squeezed by rising raw material costs and the utilisation of the industry’s capacity being below 60 per cent. In addition, the industry has resolved not to sell below cost, thus raising the prices.
Over the past couple of weeks, solar cell prices have been raised by 28 per cent. Some of the manufacturers have suspended production in view of the rising costs.
Some Chinese firm have hedged their risks, while others have cut purchases of raw materials and stopped building inventories.
Published on January 2, 2026
