Jakarta, INTI - Solar panel manufacturers are stepping up efforts to substitute silver with alternative materials such as copper after silver prices surged 130% over the past year, further pressuring margins already strained by production overcapacity, especially in China, according to industry experts.
“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.
Analysts at Heraeus noted that silver paste, a critical component in photovoltaic panels, accounts for about 30% of total solar cell production costs.
Following a 147% surge in 2025, silver prices reached a record high of $121.64 per ounce in January, driven by tight physical supply and strong retail demand, before retreating to around $77 per ounce.
The photovoltaic industry consumes approximately 196 million troy ounces of silver, representing 17% of total global demand, which is also supported by jewellery, electronics, and investment sectors.
"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 energy firm Cherry Street Energy.
Shift Toward Copper Gains Momentum
With silver priced at around $2.5 million per metric ton, solar manufacturers are accelerating the transition toward alternatives such as copper, which was recently trading at $12,823 per ton.
LONGi Green Energy Technology Co Ltd, one of China’s leading solar panel producers, announced in January that it had achieved progress in cost-saving technologies 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 Potential Savings
With copper treading at roughly 0.5% of silver’s price, the potential for additional cost reductions from such a transition is substantial, he added.
Damiani estimated that replacing silver with copper-based metallisation could generate approximately $15 billion in annual global savings, assuming 500 gigawatts of solar production per year.
However, experts caution that replacing silver is technically challenging due to its superior electrical conductivity compared with copper.
Conclusion
The solar industry’s accelerating shift from silver to copper reflects mounting cost pressures and the urgent need for material efficiency. While copper offers significant savings potential, technical challenges remain due to silver’s superior conductivity. The transition signals a broader industrial transformation as manufacturers balance performance, scalability, and cost competitiveness in the global energy transition.
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