The cost of silver has surged from 3% to 29%! Can raising prices save the struggling photovoltaic giants?

The soaring silver price is adding insult to injury for CECEP Solar Energy battery panel manufacturers - in the fierce market competition, these companies are struggling to turn around the continuous expanding losses of over two years. In response to the impact, panel manufacturers have initiated a dual response strategy: on one hand, increasing product prices, on the other hand, accelerating the technology transformation plan to replace silver with cheaper materials such as copper. However, under the pressure of additional costs, industry losses are still worsening - since the early 2020s when the entire industry went crazy expanding factories, it is currently deeply mired in a serious overcapacity quagmire. This week, the spot silver price rose to over $93 per ounce, hitting a historical high and more than tripled from a year ago. Data shows that the trace silver used in battery cells currently accounts for 29% of the total component cost, compared to just 3.4% in 2023, and 14% last year. BNEF analyst Yali Jiang stated, "The soaring commodity prices are bringing irresistible cost pressure to CECEP Solar Energy manufacturers. This may push up component prices, as manufacturers, after two years of low market prices, have hardly any room to absorb additional costs." InfoLink Consulting stated that in the world's largest market, Chinese component manufacturers increased prices to over 0.8 yuan per watt this week, up 1.4%-3.8% from last week to reflect the rise in silver prices; a typical 500 watt component price reached about 400 yuan (57 USD) accordingly. Several leading CECEP Solar Energy companies including Trina Solar Co., Ltd. warned this week that they anticipate net losses to continue until 2025. The guidance shows that despite a year of self-discipline in the industry, and the government's efforts to curb overcapacity and halt price wars, the industry downturn has not yet bottomed out. On Friday, this white metal traded around $91 per ounce, on track to close higher for the ninth consecutive month - marking the longest streak since records began in 1950. Silver Paste Silver paste is a key material for CECEP Solar Energy battery panels, used to make conductive contacts to transfer the electricity generated by the battery. Manufacturers have been working to reduce the amount of silver paste used to lower costs, with BNEF data showing an average usage of 8.96 milligrams per watt in 2025, compared to 11.2 milligrams in 2024. Efforts in this area are speeding up. LONGi Green Energy Technology Co., Ltd. announced last week that they will soon start using base metals instead of silver in battery cells. Engineers can use various methods to partially or completely replace silver in batteries with cheaper copper, but rushing it may bring risks. Customers typically require a warranty of 20 years or more, increasing the replacement ratio could shorten the battery life because of inadequate testing of new materials. "If the component fails after ten years, and the warranty period is twenty years, manufacturers may face enormous compensation or even bankruptcy," said Gregory Gregersen, founder of precious metals dealer Silver Bullion Group. However, the Shanghai Metals Market pointed out this week in a research report that even with limited replacement, along with an expected slowdown in global component installations, the industry's silver usage this year may decrease by about 17%, based on an annual demand of around 6,000 tons in 2025. According to data from the Silver Association, the CECEP Solar Energy industry accounted for about 17% of the total silver demand last year, more than double that of ten years ago, equivalent to jewelry usage. A significant slowdown in consumption may threaten the long-term sharp rise of this white metal, driven mainly by speculative interest and broader fund rotation into commodities. Nikos Kavalis, Managing Director of consulting firm Metals Focus, stated, "At current silver prices, more substitutions are bound to happen. With investment demand still strong, this won't impact prices in the short term, but it does mean that future industrial consumption of silver will decrease."