Silver Demand Falls 19% as Solar Output Slows
Silver consumption in the solar sector drops to 151 million ounces in 2026. Manufacturers reduce metal usage per cell to cut costs. The AI data center thesis faces growing skepticism.
Silver demand from solar panel manufacturers falls 19% in 2026. Consumption drops to roughly 151 million ounces. This follows a 6% decline to 186 million ounces in 2025. The metal loses ground in its largest industrial application.
Solar producers reduce silver content per cell to lower costs. They substitute the metal with cheaper alternatives. This trend offsets previous growth in the sector. The market faces a structural shift in demand drivers.
Solar sector cuts metal usage
Silver consumption in photovoltaics doubled from 2020 to 2024. Usage rose from 82 million to 197 million ounces. This growth drove the market into deficit. The 2026 forecast marks a sharp reversal.
Silver offers higher electrical conductivity than copper. It resists oxidation better. However, silver costs US$2.13 per gram. Copper costs US$0.015 per gram. Manufacturers switch to copper to save money.
StoneX Financial notes flat solar output projections for 2026 to 2028. Oversupply in Europe accelerates the shift. Silver demand is expected to stabilize after the drop. The cost gap drives substitution.
AI data center growth stalls
Analysts cite electronics as a key demand driver. Data centers require significant silver for components. This sector was expected to offset solar declines. Recent events challenge this view.
CPM Group predicts silver loses half the solar industry over ten years. It also faces substitution in jewelry and electronics. The firm warns of a prolonged demand weakness. The AI investment rush may be pausing.
Industry leaders urge caution
Anthropic CEO Dario Amodei calls for slower AI development. OpenAI halts its IPO plans. Elon Musk agrees with the caution. These moves signal a cooling in AI infrastructure spending.
GN auto markets/commodities data highlights this structural change. The metal faces pressure from multiple fronts. Solar thrift and AI hesitation combine. The silver market enters a new phase of adjustment.
