Many analysts believe the solar industry has already passed its peak growth phase. The International Energy Agency (IEA) estimated that achieving net-zero emissions would require annual installations of 630 gigawatts (GW) of photovoltaic (PV) modules between 2030 and 2050. However, data shows that last year's grid-connected capacity of 654 GW easily surpassed this target. Sam Wilkinson, Head of Renewable Energy at S&P Global Commodity Insights, recently stated that global PV grid connections are expected to decline by 2026. If the "buffer" demand included in forecasts to account for the solar sector's history of exceeding expectations is removed, it appears future installations may never surpass the levels seen in 2025.

For a different perspective, consider the performance of one of the hottest commodities over the past year. Despite a pullback from its late-January all-time high of $121.65 per ounce, the price of silver has still surged 154% year-over-year. Like any major commodity price spike, this is driven by both fundamental factors and speculative activity. However, even speculators base their bets on physical market conditions; industrial users account for 60% of silver consumption, with the solar industry representing a significant portion of the demand growth over the past decade.

Silver's high conductivity makes it a critical material in PV modules, where fine printed contact points enhance electrical output. Last year, solar manufacturers consumed approximately 196 million ounces of silver, equivalent to the entire jewelry sector's usage and about 17% of total global consumption. The recent price surge can be largely attributed to the industry's shift towards TOPCon technology, a newer solar cell design that requires more silver. However, due to the metal's cost, module manufacturers have become experts at reducing usage. This thrifting effort has reduced silver consumption per watt by an average of about 15% annually, dropping from 73 micrograms in 2011 to just 8 micrograms last year.

According to the Silver Institute, the growing adoption of silver-coated copper powder, a composite material, can reduce silver usage by 30% to 50% with minimal loss of electrical efficiency. The current high price of silver is likely to accelerate these efforts. If the industry maintains its historical annual thrifting rate of 15%, the amount of silver consumed by solar panels could plummet dramatically. By 2035, even if industry installations increase by one-third, the required silver might only be about a quarter of last year's consumption. Based on this projection, silver appears headed for a significant supply surplus, which should theoretically pressure prices lower.

Despite silver's diverse applications, other sectors seem unlikely to compensate for a potential drop in PV demand. While electric vehicles contain more electrical contacts than traditional cars, the Silver Institute projects their usage will only increase from about 80 million ounces this year to 94 million ounces by 2031—a small figure compared to a potential loss of around 150 million ounces of demand from the solar market. Artificial intelligence is another growing field, but semiconductor industry consumption remains relatively modest at around 30 million ounces, and this could even decrease with wider adoption of silver-coated copper powder.

Given the historical success of thrifting, it is difficult to argue that silver prices should remain at current levels. At least 80% of mined silver comes from operations that remain profitable with prices below $30 per ounce. Many mines also produce by-product gold or copper—metals that are themselves in high demand—which would ensure a continued flow of silver supply even if demand specific to silver weakens.

Over the past decade, the solar industry has been the dominant driver of silver demand growth. If one believes that solar installations have essentially peaked, then shorting the silver futures curve presents a significant opportunity. But what if the current predictions of a solar peak are as illusory as all previous forecasts? The IEA's history of underestimating solar potential is almost as long as the industry's existence as a major force.

Solar panels are now being deployed in applications once considered impractical. In wealthy nations, they have become cheap enough to be used as fencing panels or plug-in devices for balconies. In countries like Pakistan and Saudi Arabia, entire power markets have emerged on a scale significant enough to reshape grids. A similar process is now unfolding in Sub-Saharan Africa. Plummeting battery prices are further extending solar power's reach beyond daylight hours, enabling energy storage for morning and evening peak demand.

Global energy demand is far from satisfied. In almost every region, solar power represents the cheapest solution to meet this demand. The soaring price of silver suggests that this boom is far from over.