Silver Price Surge Threatens Solar Industry as Manufacturers Rush to Copper Alternative
Published · 4 min read
The global solar industry is facing a critical crisis as silver costs have exploded from 3.4% of solar panel expenses in 2023 to 29% today, threatening to slow the world’s transition to renewable energy.
With silver prices hitting a record $110 per ounce in January 2026, up more than four-fold from 2024 levels, manufacturers are scrambling to replace the precious metal with copper-based alternatives before financial losses spiral further out of control.
From Minor Cost to Major Crisis
Solar panels rely on silver paste for electrical contacts inside photovoltaic cells. Each standard panel contains about 15 to 25 grams of silver, essential for its superior conductivity in converting sunlight into electricity.
What was once a manageable expense has become the second-largest cost in solar panel production. For a typical $50 solar panel, nearly $15 now goes to silver costs, up from less than $2 just two years ago.
The timing could not be worse for an industry already struggling with brutal overcapacity and intense price competition.
Perfect Storm Hits Struggling Industry
China dominates global solar manufacturing with over 80% of worldwide capacity. By September 2025, the country’s installed solar capacity reached 1.1 terawatts, approximately 1.5 times the peak load of the entire US power grid.
This rapid expansion created a market glut that triggered price wars. Solar module prices have plummeted by over 30% since the start of 2025.
The financial damage has been severe. In the third quarter of 2025 alone, the top six Chinese solar companies reported a combined loss of $2.8 billion. Industry forecasts suggest nine major companies could see total losses exceeding $9 billion for the entire year of 2025.
China’s Ministry of Industry and Information Technology has now urged solar companies to slow expansion and accelerate efforts to replace silver with copper and other base metals.
Racing Toward Copper Solution
Major manufacturers are moving quickly to adopt copper alternatives. The material is approximately 100 times less expensive than silver while offering comparable electrical conductivity.
LONGi Green Energy Technology announced plans to begin mass production of base-metal photovoltaic cells in the second quarter of 2026. JinkoSolar Holding is looking to roll out large-scale production of solar panels using base metals, while Shanghai Aiko Solar Energy is already producing 6.5 gigawatt solar cells without silver.
The shift could dramatically reduce the solar industry’s silver appetite. Analysts expect solar to reduce silver use by about 17% this year. The sector accounted for approximately 17% of total silver demand in 2025, roughly on par with jewelry, according to the World Silver Survey 2025.
Technical Hurdles and Breakthroughs
The transition to copper faces challenges. Copper is more prone to oxidation and degradation than silver, raising concerns about long-term reliability. Solar panels typically come with 20 to 25 year warranties.
Recent technological advances have given the industry reason for optimism. In late 2025, TNO, a Netherlands-based research organization, successfully applied copper electrodes to silicon heterojunction solar cells using a new screen-printing process. The resulting cells achieved performance within 1% of traditional silver-metallized cells.
The copper-metallized cells can be manufactured using existing screen-printing technology, making industrial implementation relatively straightforward.
A recent study published in Progress in Photovoltaics showed that fully copper-metallized heterojunction cells achieved a champion efficiency of 23.08%, compared to 23.79% for silver-based cells. The difference of less than 3% may be acceptable given the dramatic cost savings.
Industry analysts estimate that copper substitution could reduce cell manufacturing costs by as much as 0.03 USD per watt, which might mean the difference between profits and losses for struggling manufacturers.
Testing the Solution
Radovan Kopecek, co-founder of the International Solar Energy Research Center Konstanz, said an immediate transition to copper is technically and economically feasible. Copper screen printing can be implemented quickly, and the center has received many inquiries about it.
BloombergNEF analysts expect silver demand from photovoltaic modules installed this year to fall to about 194 million troy ounces, a 7% year-on-year decline as manufacturers accelerate material substitution efforts, a shift also emphasized in the Silver Institute report on next-generation metal demand.
The question is not whether the industry will move to copper, but how quickly it can overcome the remaining technical challenges.
What Comes Next
As Longi begins mass production of copper-based cells in the second quarter of 2026, the industry and the global clean energy transition will be watching closely.
Success could not only save the solar industry from its current crisis but potentially accelerate the renewable energy transition by making solar power more affordable and scalable.
Failure could mean costly roadblocks for an industry critical to global climate goals, just when the world needs renewable energy the most.
For now, the solar industry finds itself in a race against time, where copper may prove to be the solution that keeps the green revolution on track.
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