Solar industry shifts away from silver due to rising costs

Solar panel producers are intensifying their efforts to replace the silver in solar panels with copper, after the price of silver has risen?130% during the last year. This is putting pressure on margins, which were already under pressure due to overcapacity.

Derek Schnee, Senior Commercial Solar Consultant at JK Renewables said that silver is the biggest contributor to the increase in the cost of manufacturing solar panel. He added that the cost has increased by 7-15% within the past year.

Heraeus analysts note that silver paste,?a key component for photovoltaic cells, accounts for 30% of the total cost of solar cells.

Silver prices reached a high of $121.64 per ounce in early January, amid tight physical supply and retail buying. They then fell to $77.

The silver demand for jewellery, electronics and investment is also largely driven by the photovoltaic industry, with 196 million troy-ounces or 17% of total demand.

Ben Damiani is the Chief technology officer at Cherry Street Energy, a renewable energy company. He said that silver paste costs for a 450-watt module in the U.S. have increased from $5.22 to $17.65 by 2025.

SHIFT TO COPER GAINS MOMENTUM

Silver is worth $2.5 million per metric tonne, and solar manufacturers are increasingly turning to alternatives, such as copper. Copper was trading last at $12,823 a tonne.

LONGi, China's largest solar panel manufacturer, announced in January that it had developed a cost-saving technique involving base metals. It plans to start mass production between April and June.

Marius Mordal Bakke is vice president for solar supply chain research, Rystad Energy. He said that this year the industry will see a greater shift, with manufacturers switching to pure copper metallisation or hybrid silver-copper pasts.

BILLIONS OF SAVINGS?FORECAST

Copper is currently trading at 0.5% the price of silver, so there are huge potential cost savings from switching, according to him.

Damiani, Cherry Street Energy, estimated that switching from silver-based to copper-based metallisation would save the sector $15 billion per year at 500 gigawatts.

Experts said that replacing copper with silver, which has a higher electrical conductivity, is difficult due to its higher conductivity.

(source: Reuters)