Surging Silver Prices Push Solar Panel Costs Above 0.8 Yuan per Watt, Sparking Industry Turmoil

Component prices have surged past 0.8 yuan per watt! Are solar companies experiencing a “silver heist”? Increasingly, evidence suggests that the recent surge in global silver prices is putting additional pressure on solar panel manufacturers. These companies have been enduring a loss streak that has lasted for two years, compounded by fierce competition within the industry.

As of January 16, 2026, spot silver prices peaked at over 93 dollars per ounce, reaching an all-time high, and have more than tripled in value over the past year. According to industry research, the cost of silver used in solar panels now accounts for 29% of the total panel cost, a significant increase from 3.4% in 2023 and 14% last year. In response, solar panel manufacturers are competing by raising prices and accelerating plans to substitute silver with cheaper materials like copper. However, as costs continue to rise, the industry’s losses are mounting, exacerbated by a severe oversupply following years of rapid expansion.

Industry insiders have pointed out that the soaring prices of commodities, particularly silver, are placing unbearable cost pressures on solar manufacturers. This could lead to increased prices for solar components because manufacturers, after two years of depressed market prices, have little room to absorb additional costs.

According to data from InfoLink Consulting, in China, the world’s largest photovoltaic market, some component manufacturers have increased their prices to over 0.8 yuan per watt, reflecting an increase of 1.4% to 3.8% from the previous week to account for rising silver costs. This implies that the price of a typical 500-watt solar panel will now be at least 400 yuan (approximately 57 dollars).

As reported by Shanghai Nonferrous Metals Network, on January 15, the domestic BC component-210R (distributed) reached a peak price of 0.815 yuan per watt, with an average price of 0.798 yuan per watt. Additionally, the cost index for Topcon183 components also surpassed 0.80 yuan per watt, reaching 0.821 yuan.

Several major solar companies, including Trina Solar and JinkoSolar, have warned this week that they expect to incur net losses again in 2025. These forecasts indicate that, despite a year of industry self-regulation and government-led efforts to curb excess capacity and stop price wars, the industry downturn has not shown significant improvement.

Efforts to Reduce Silver Usage

Silver paste is a critical material in solar panels. According to industry research, to cut costs, photovoltaic manufacturers are actively seeking to reduce the amount of silver paste they use, with the average consumption expected to drop to 8.96 milligrams per watt in 2025, down from 11.2 milligrams in 2024.

Efforts to find “alternatives” to silver are currently accelerating. Longi Green Energy announced last week that it will soon begin using base metals instead of silver in its batteries, joining companies like JinkoSolar and JA Solar in this initiative. Engineers can indeed use various methods to substitute part or even all of the silver in batteries with cheaper copper, but rushing this process may pose risks for manufacturers.

Customers of photovoltaic panels typically demand warranties of 20 years or more, and increasing the proportion of substitutes may raise the risk of reduced lifespan, as testing new materials takes less time. “If the panels fail after ten years but have a warranty of twenty years, manufacturers could face significant liabilities, potentially leading to bankruptcy,” stated Gregor Gregersen, founder of Silver Bullion Group.

According to the Silver Institute, the photovoltaic industry accounted for approximately 17% of total silver demand last year, more than double its share a decade ago and comparable to the volume used in jewelry manufacturing. A significant slowdown in consumption could threaten the long-term sustainability of rising silver prices. The current surge is primarily fueled by increased speculative interest and commodity rotation effects.

“At current silver price levels, more substitutions are likely to occur,” said Nikos Kavalis, executive director of Metals Focus. “Given that investment demand remains strong, I believe this will not impact prices in the short term, but it does indicate that silver consumption in the industry will decrease in the future.”