(C) Ahead of the Herd

SEOUL — The global solar panel manufacturing industry is facing a significant supply chain crisis as the price of silver, a critical raw material for photovoltaic (PV) cells, continues to experience extreme volatility. With profit margins already squeezed by Chinese overproduction, manufacturers are now racing to integrate copper as a primary substitute to keep production costs viable.

The Silver Surge: A 147% Price Jump
According to industry experts cited by Reuters on February 19, the cost of silver has placed immense pressure on solar panel producers over the past twelve months. In 2025 alone, silver prices surged by 147%, driven by a combination of investment demand for precious metals and increasing industrial consumption.

While the price hit a record high of $121.64 per ounce in January 2026 before correcting to the current level of approximately $77, the impact on the bottom line has been profound. Currently, the PV sector accounts for roughly 17% of total global silver demand.

Impact on Manufacturing Costs
Silver paste, used to conduct electricity within the solar cell, is the most expensive component of the panel excluding the silicon wafer itself.

Cost Proportion: Silver paste now accounts for nearly 30% of the total cost of a solar cell.
Price Hike: Derek Schnie, Senior Consultant at JK Renewables, noted that solar panel prices have risen by 7% to 15% over the last year specifically due to silver's appreciation.
Unit Increase: Ben Damiani, CTO of U.S.-based Cherry Street Energy, illustrated the gravity of the situation: "The cost of silver paste for a 450-watt module in the U.S. rose from approximately $5.22 early last year to roughly $17.65."

The Copper Alternative: Opportunities and Hurdles
As silver becomes cost-prohibitive, copper has emerged as the most viable alternative. Copper currently trades at roughly 0.5% of the price of silver, offering a massive opportunity for cost reduction.

"We expect a significant industry-wide shift this year," said Marius Mordal Bakke, Vice President of Solar Supply Chain Research at Rystad Energy. "Major manufacturers are transitioning toward pure copper metallization and hybrid silver-copper pastes to mitigate financial risks."

However, the transition is not without technical challenges:

Conductivity: Silver remains the most conductive metal on Earth. Replacing it with copper can result in a slight drop in cell efficiency.
Oxidation: Unlike silver, copper oxidizes easily during the manufacturing process, which can lead to long-term reliability issues if not handled with advanced coating technologies.
Outlook for 2026
The solar industry is at a crossroads. While the price of silver has retreated from its January peak, the structural demand for renewable energy means that relying on a single precious metal is no longer a sustainable strategy. As manufacturers refine "copper plating" and "silver-coated copper" technologies, the industry moves closer to a future where solar energy is decoupled from the volatility of the precious metals market.