Not only is the demand for silver panels growing, but the amount of silver used in each panel is also increasing.

Industrial demand for silver set a record of 654.4 million ounces in 2023 and it is expected to hit new highs this year. According to the Silver Institute, ongoing structural gains from green economy applications underpinned this surge in silver demand.

"Higher than expected photovoltaic (PV) capacity additions and faster adoption of new-generation solar cells raised global electrical & electronics demand by a substantial 20 percent. At the same time, other green-related applications, including power grid construction and automotive electrification, also contributed to the gains."

Silver is the best conductor of electricity of all metals at room temperature. That makes it a vital input in the production of solar panels.  

To manufacture a solar panel, silver is formed into a paste that is applied to the front and back of silicon photovoltaic cells. The front side collects the electrons generated when sunlight strikes the cell, while the back side helps to complete the electrical circuit.

Each solar panel uses approximately 20 grams (0.643 ounces) of silver. While this is a relatively small amount, the total adds up quickly when you consider the number of panels produced each year. The solar industry used approximately 100 million ounces of silver in 2023, accounting for about 14 percent of total silver demand.

Several years ago, analysts assumed that the amount of silver used in solar panels would decline over time with the development of new technologies. However, a Saxo Bank report in 2020 disputed this claim, saying, "Potential substitute metals cannot match silver in terms of energy output per solar panel."

"Further, due to technical hurdles, non-silver PVs tend to be less reliable and have shorter lifespans, presenting serious issues for their widespread commercial development."