Rising silver prices are clouding the solar industry's chances of competing with non-renewable sources of energy i.e. fossil fuels. Solar panel makes require about 11% of the world's supply of silver which is used to conduct electricity in solar cells. Silver prices have increased by 74% and from $20.24 last year to $35.30 so far. According to Bloomberg New Energy Finance, even though the solar cell prices have gone down by about 27% this year, rising silver prices have prevented their prices from going down further as each panel requires about 20gms of silver.
Shawn Qu, the Chief Executive of Canadian Solar Inc. based in China says that as the global silver prices have gone up a lot and silver paste is used on solar cells as the front side contact material, the increase in silver prices will be challenging in the efforts to reduce cost of solar cells.
According to a research by Barclays Capital, silver prices peaked at $48.44 an ounce on April 28, and if it goes back to that level, the share of silver in the cost of producing each panel would increase by 13% to 15%.