Global silver demand from the photovoltaic sector is expected to decline by 19% year-over-year (YoY) to 151 million ounces in 2026.

According to the World Silver Survey 2026 published by the Silver Institute, the decline follows a 6% drop in 2025, when photovoltaic silver demand fell to 186.6 million ounces from 197.5 million ounces the previous year.

The report attributes the decline to faster silver thrifting and substitution in solar cells, which reduced silver loadings enough to outweigh continued growth in global cell production.

Silver loading refers to the amount of silver used in a solar cell, usually measured in milligrams per cell or milligrams per watt of power output.

The findings suggest that solar manufacturing is becoming less dependent on silver even as global solar installations continue to expand.

Industrial silver demand fell 3% to 657.4 million ounces in 2025, marking its first decline since the pandemic after four consecutive years of growth. While demand from grid infrastructure, automotive applications, and artificial intelligence (AI)-driven electronics remained strong, these gains were insufficient to offset weaker photovoltaic demand.

The report forecasts industrial silver demand will decline another 3% in 2026 to 639.6 million ounces. Continued growth in industrial uses is again expected to be outweighed by falling silver demand from the photovoltaic sector.

The shift comes as silver prices remain elevated. The metal averaged just over $40/oz in 2025, up 42% YoY, after rising from below $29/oz at the beginning of the year to approximately $84/oz in December. The report attributes the rally to persistent supply deficits, tightening physical inventories, and strong investment demand.

The silver market recorded a deficit of 40.3 million ounces in 2025, its fifth consecutive annual shortfall. Metals Focus expects another deficit of 46.3 million ounces in 2026, extending the run to six consecutive years.

According to the report, the sustained deficits have reduced the amount of freely available metal in the market. By the end of September 2025, physically backed investment products accounted for an estimated 83% of silver held in London vaults, leaving only about 136 million ounces available for trading and leasing. A surge in demand from India later triggered a sharp liquidity squeeze, which gradually eased.

Mercom previously reported that China’s silver inventories had fallen to record-low levels, raising concerns over global supply availability for silver-dependent industries, including solar manufacturing. The decline in inventories highlighted the growing vulnerability of the solar supply chain to persistent market deficits and tightening physical availability of the metal.

The report says the photovoltaic industry is increasingly responding to higher silver prices by reducing the amount of silver used in each cell rather than slowing production.

The trend has been building for years. Installed global photovoltaic capacity increased more than tenfold during the decade through 2024, led by China, Europe, and the U.S. During the same period, silver demand from photovoltaics increased only threefold because manufacturers steadily reduced the amount of silver required per cell. Photovoltaics accounted for approximately 29% of industrial silver demand in 2024, compared with 11% in 2014.

The report notes that high silver prices are accelerating this process. It expects continued price-led thrifting and substitution in photovoltaics to contribute to consecutive annual declines in silver demand, even as demand from data centers, grid infrastructure, automotive applications, and aerospace continues to grow.

The transition to higher-efficiency n-type solar cells adds another dimension to the trend. According to another report by the Silver Institute, tunnel oxide passivated contact (TOPCon) cells currently use about 50% more silver than passivated emitter and rear contact (PERC) cells. Although silver consumption in next-generation technologies is expected to decline as manufacturing processes improve, their silver requirements could remain above those of today’s PERC cells for years.

This has increased interest in alternative metallization technologies. The report says silver-coated copper powder can reduce silver consumption by between 30% and 50% while maintaining similar cell performance. It also expects copper-plating technologies, which currently account for only a small share of global production, to become increasingly important in the coming years.

The shift toward lower-silver technologies could also help Indian manufacturers navigate evolving trade policies. Earlier this year, Mercom reported that India had moved certain silver bar imports from the Free category to the Restricted category, a policy change that industry participants said could increase procurement complexity and put additional cost pressure on domestic solar cell and module manufacturers.

As manufacturers work to reduce silver consumption per cell, such technological advances could also help mitigate the impact of supply-side disruptions and import restrictions.