A new report from Metal Focus shows that the global silver market remains structurally tight, with high prices, a fifth consecutive annual supply shortage by 2025 and continued mining and recycling restrictions despite modest production growth. At the same time, demand for PV silver is falling sharply due to cost pressure and thrift.
The global silver market remains structurally tight despite weaker demand from the photovoltaic sector, with high prices and limited supply continuing to shape the PV production landscape.
According to the latter World Silver Survey 2026 According to independent research consultancy Metals Focus, silver prices rose sharply in 2025, averaging just over $40 per ounce, up 42% year-on-year, before rising to even higher levels in early 2026. The rally was driven by a combination of strong investment demand, tighter physical supply and persistent geopolitical and macroeconomic uncertainty.
At the same time, the solar energy sector, long a key driver of industrial silver demand, is entering an adjustment period. Silver demand from PV producers fell 6% to 186.6 million ounces in 2025 and is expected to fall another 19% to about 151 million ounces in 2026.
“Industrial offtake fell 3% to 657.4 million ounces, marking the first post-pandemic decline, as a contraction in PV demand and savings elsewhere outweighed gains associated with AI-related data centers, high-speed transmission hardware, EV penetration and charging infrastructure,” the report said.
The decline in PV-related silver consumption reflects a combination of technological changes and cost pressures. As silver prices rose, module manufacturers accelerated their efforts to reduce the silver burden per cell by implementing savings strategies and alternative metallization approaches.
The analysts explained that intense competition and rising raw material costs have prompted manufacturers to reduce their use of silver, even as global solar installations continue to grow. They noted that this growing disconnect between PV capacity expansion and silver demand marks a significant shift for the industry.
On the supply side, global silver mine production rose significantly last year, supported by the ramp-up of mining projects in Latin America. Recycling also increased modestly, reaching a 13-year high of 197.6 million ounces.
Despite these positive results, the silver sector recorded a fifth consecutive deficit in 2025, totaling 40.3 million ounces. A new shortage is expected in 2026. Structural constraints, including declining ore grades, operational disruptions and a limited pipeline of new projects, are expected to continue to limit supply growth. Recycling volumes are increasing, but remain limited by refinery bottlenecks and capacity problems.
The report also shows that while solar demand weakened, other segments such as AI-powered data centers, electric vehicles and energy infrastructure continued to support consumption.
Looking ahead, overall industrial demand is expected to decline again in 2026, with further weakness in the PV sector outweighing gains in emerging applications. However, silver is expected to remain a strategic material risk for PV manufacturers, even as technological innovation continues to reduce dependence on the metal.
According to a recent analysis by the Silver Institute, the photovoltaic industry is expected to use less silver by 2026. Silver paste currently accounts for approximately 10-20% of total solar cell costs, creating a difficult environment for manufacturers already dealing with overcapacity, falling module prices and tight margins.
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