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Silver Gets More Precious Due to Solar Cutbacks
Silver’s Rally Runs Into a “Fundamental” Problem
Authored by GoldFix
Silver’s explosive rally in 2025 may have looked like the beginning of a new structural bull market, but Bank of America argues the move was driven less by industrial fundamentals and more by investor flows, liquidity shortages, and fears surrounding physical supply dislocations. According to the bank’s latest Global Metals Weekly report, the same industrial demand story that helped push silver above $120/oz may now be weakening underneath the surface.
The core issue centers on solar demand. For more than a decade, solar photovoltaic manufacturing effectively rescued silver after the collapse of photography demand left the market structurally weak. Solar installations steadily increased silver consumption, tightening balances and supporting deficits across much of the past five years. The report argues that trend may now be peaking.
“Reduced use means that the silver deficit could decline by 90% this year.”
According to the analysts, soaring silver prices created enormous margin pressure for solar manufacturers, forcing aggressive “thrifting” efforts across the industry. In practical terms, manufacturers are redesigning products to use less silver per panel. At the same time, solar technology itself is evolving toward architectures that require lower silver loadings.
The report walks through the technological transition occurring across solar manufacturing. Older PERC panels, which once dominated the market, are increasingly being displaced by newer N-type technologies such as TOPCon and HJT cells. These newer systems improve conversion efficiency while simultaneously reducing silver intensity. Combined with slowing solar installations in China and Europe, the result is a meaningful moderation in industrial silver demand growth.
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