LONGI Ditches Silver for Base Metals as Solar Industry Faces Price Crunch

LONGI Green Energy Technology announced on Monday that it will begin replacing silver with base metals in its solar cell production. This is in line with the industry’s response to the metal's unprecedented price surge. 

The Chinese manufacturer plans to commence mass production using the new material composition in the second quarter, a move expected to substantially reduce the manufacturing cost of solar modules. Besides, it could also thropw up serious question marks on the ongoing boom in silver prices, if the move finds wider adoption over the next few months. 

Silver Shortage Reshapes Solar Economics

The decision reflects mounting pressure within the solar industry, which consumes more silver than any other industrial sector. A combination of factors has created a perfect storm in the silver market.

The record-high prices driven by geopolitical tensions, safe-haven investment flows, and monetary policy shifts have forced manufacturers to reassess their reliance on the precious metal.

The scale of silver's impact on solar economics has become stark. Between October and December, silver's share of the per-watt cost of solar modules jumped dramatically from 12 percent to more than 17 percent, according to a BloombergNEF analysis. 

This represents a seismic shift from just two years prior, when silver accounted for merely 3 percent of module costs in 2023. Late last month, spot silver prices reached USD 84 per ounce, triple the prices seen just a year earlier. This reflects an imbalance between investor demand and constrained supply dynamics.

Industry-Wide Transformation Underway

LONGI is not alone in this strategic pivot. The transition toward base metal alternatives, particularly copper, has already begun spreading across China's solar manufacturing ecosystem. Jinko Solar, another leading manufacturer, announced in December that it expects to achieve significant large-scale production of panels utilizing base metals this year. Shanghai Aiko Solar Energy, for instance, has already launched production of silver-free solar cells, with an initial capacity of 6.5 gigawatts.

Unlike most of its competitors, Longi produces back-contact solar cells, which generate more power from the same amount of sunlight. Although they hold a smaller share of the market compared with the more mainstream TOPCon technology, it’s easier to replace silver with base metals in BC cells, Longi said in May.