Why has the amount of silver used in photovoltaics continued to decline over the past two months? [SMM Analysis]

Since mid-May, the amount of silver used in photovoltaics has started to decline MoM. Although it continues to increase YoY, it still leaves upstream enterprises puzzled or worried. Why does the monthly silver usage in photovoltaics keep decreasing?

The amount of silver used in photovoltaics in 2024 increased significantly YoY. This was due to the large-scale commissioning of TOPCON production lines in H2 last year, the replacement of P-type with N-type leading to higher unit consumption, and the increased share of localised N-type silver powder, which will not be elaborated here.

Additionally, from a MoM perspective, after reaching a peak in silver powder demand in April, both May and June showed a downward trend. Why is this?

The chart above shows the changes in solar cell production. The decline in production demand from May to June led to a decrease in upstream demand. However, you may notice that the solar cell production did not change much from April to May. Why did the demand for silver in photovoltaics also decrease?

Changes in Unit Consumption

Entering 2024, due to intensified industry competition, solar cell prices have declined, while silver prices have continued to rise. Downstream producers have reduced the unit consumption of individual solar cells through localisation of silver powder, silver-coated copper products, 0BB technology, and technical optimisations of the main and fine grids.

Due to different technological developments and varying solar cell sizes among companies, the unit consumption varies across different companies and times. The author has tried to list the average values for different time periods for reference. In Q3 2023, the unit consumption of PERC solar cells on the front side was approximately 45-60 mg per cell. As the market technology mainly shifted towards TOPCON in 2024 and PERC approached laboratory values, the unit consumption of PERC solar cells decreased but not significantly. For TOPCON and HJT, the changes were relatively larger. By the end of 2023, leading companies had reduced unit consumption to below 100 mg per cell. In February and March, the unit consumption of 182 TOPCON solar cells was 90-120 mg per cell, and in June and July, it was 80-100 mg per cell. For HJT, the reduction was significant this year. Last year, the unit consumption of HJT was roughly twice that of PERC. Currently, the unit consumption of 20BB HJT is 110 mg per cell, and for 0BB HJT, it is 70 mg per cell. Previously, HJT only used silver-coated copper on the back side, but now the overall silver content in HJT silver-coated copper has been reduced by 50%, and the market is still experimenting with even lower silver content.

Silver Price Changes

This year, the price of silver has significantly increased YoY. Last year, the market's procurement of silver powder and silver paste was primarily driven by demand, with stable, scheduled, and quantified purchases. However, this year, with the significant increase in silver prices, the market has started to consider issues related to silver prices and demand, questioning whether to make essential or stockpile purchases. In summary, the expansion of downstream photovoltaic producers and the increase in the number of companies have led to a reduction in the operating rate. Changes in demand have made industry orders unstable, low-price orders have extended delivery cycles, the rise in silver prices, and the uncertainty of demand expectations for H2 have weakened stockpiling demand. The decrease in unit consumption has led to a drop in demand, all of which have collectively slowed down the consumption of silver for photovoltaics in the past two months.