Silver reaching new highs forces solar energy companies to transform their technology, with copper becoming the biggest beneficiary

Despite a significant reduction in market speculative positions in silver, spot silver prices continue to rise, reaching a historic high of $94, leading solar module manufacturers to face unprecedented cost pressures. Silver’s share of total module costs has surged from a low point in 2023 to nearly 30%, forcing industry players to raise prices to offset losses. In response to this dilemma, the industry is accelerating technological transformation, attempting to reduce silver paste usage or seek alternative materials to maintain competitiveness. At this time, copper has become the biggest beneficiary, with copper prices increasing by 40% within a year.

Silver Speculative Positions Retreat and Uncertainty in Tariff Policies

According to the latest trading data released by the U.S. government, for the week ending January 13, hedge funds and large speculators reduced their net long positions in silver by 15%, down to 15,045 contracts, hitting a nearly 22-month low. This withdrawal of funds occurred before the White House officially decided on tariff policies, reflecting risk-averse actions by capital managers in the face of macro policy uncertainties. Although U.S. President Trump ultimately did not impose import tariffs on key minerals including silver, he did not rule out future possibilities. This policy ambiguity, combined with market concerns over precious metal supply, continues to be a key macro factor supporting silver prices oscillating at high levels.

Raw Material Costs Surge, Solar Manufacturers Face Loss Challenges

Spot silver prices broke through a historic high of $94 per ounce this week, more than doubling compared to the same period last year. According to BloombergNEF data analysis, silver’s cost share in solar cells has skyrocketed from 3.4% in 2023 and 14% last year to 29% currently. For solar manufacturers already suffering from overcapacity and price wars, this is an additional blow. Major companies such as Trina Solar and Jinko Solar have issued warnings, predicting continued net losses into 2025. To reflect costs, Chinese module manufacturers have raised prices to over 0.8 RMB per watt this week, an increase of approximately 1.4% to 3.8%, indicating that the industry chain can no longer absorb additional raw material costs on its own.

Elon Musk Warns Silver Price Rise Could Trigger Tech Crisis

Global billionaire Elon Musk recently responded to reports of silver reaching new highs on his social platform X:

This is not good news. Silver is an indispensable raw material in many industrial processes.

As CEO of Tesla, which has electric vehicle and solar energy businesses, and SpaceX, both companies’ manufacturing processes are highly dependent on silver.

Accelerating Technological Transformation, Copper Process Becomes Cost-Reduction Key

Faced with structural pressure from high silver prices, the solar industry is speeding up the adoption of alternative solutions. Silver paste is a key material for creating conductive contacts in solar cells, and manufacturers are working to reduce its usage per unit. Forecasts suggest that by 2025, the average silver consumption per watt will decrease to 8.96 milligrams, down from 11.2 milligrams in 2024. More radical changes involve material substitution, with Longi Green Energy recently announcing plans to replace silver with base metals (metals other than gold, silver, platinum, palladium, etc.) in cell manufacturing processes. Jinko Solar and Aiko (Shanghai Aiko) have also joined this transformation. This shift toward cheaper metals like copper is not only for cost reduction but also a survival strategy amid increasing raw material price volatility.

The “De-silverization” Accelerates: Copper Becomes the Biggest Beneficiary

While demand has surged due to technological transformation, supply faces severe challenges. According to the latest assessments by Morgan Stanley and Goldman Sachs, the global copper market in 2026 may face the most severe supply deficit in the past 20 years. Major copper-producing countries like Chile and Peru are constrained by declining ore grades, strikes, and environmental regulations, with new capacity releases far below expectations.

As demand continues to grow, copper prices have risen about 40% over the past year.

(“All-In Podcast” Forecasts 2026: AI, Copper, and Power as the New Global Economic Pillars)

This article, “Silver Reaches New Highs Forcing Solar Manufacturers to Transform, Copper Becomes the Biggest Beneficiary,” first appeared in Lian News ABMedia.