Solar Sector demand to consume 20% of annual silver supply, says MOFSL
MOFSL projects that by 2027, solar panel manufacturers could require "more than 20 per cent of the current annual silver supply to meet installation targets."
- Oct 15, 2025,
- Updated Oct 15, 2025 4:17 PM IST
The global shift towards green energy is driving an unprecedented surge in silver demand, with the solar sector emerging as a dominant consumer of the white metal, Motilal Oswal Financial Services (MOFSL) said.
MOFSL noted that this accelerating industrial demand, combined with persistent supply shortfalls, marks a departure from previous speculative rallies—paving the way for a sustained structural bull market in silver.
In its report titled "Silver 2030 – The Unprecedented Rise," MOFSL projects that by 2027, solar panel manufacturers could require "more than 20 per cent of the current annual silver supply to meet installation targets." The solar photovoltaic (PV) segment alone is expected to consume over 200 million ounces of silver in 2025. This surge, the report says, is so strong that it is overpowering efforts to cut silver usage per panel—what MOFSL calls the “Thrifting Paradox.” Even as manufacturers attempt to use less silver due to soaring prices, the rapid expansion of global solar capacity continues to drive overall demand higher.
This boom in solar-driven consumption is the chief factor behind the ongoing market deficit, which MOFSL expects to persist for a fifth straight year in 2025, with a projected shortfall of about 118 million ounces. Supply constraints are deepened by the nature of silver production—around 75 per cent of global output comes as a by-product of mining other base metals like copper, lead, and zinc. As a result, silver output cannot be scaled up quickly in response to rising prices.
Beyond solar energy, silver’s indispensable role in other green technologies is adding to the pressure. The electrification of transport is one such driver, with each electric vehicle (EV) consuming 25 to 50 grams of silver—far more than a conventional internal combustion engine vehicle. The report highlights that silver demand from the automotive sector is likely to triple by 2040. Meanwhile, electronics remain silver’s largest industrial consumer, buoyed by the rollout of 5G networks, AI hardware, and next-generation consumer devices.
For Indian investors, MOFSL noted that the investment case is "substantially amplified by foreign exchange dynamics." A combination of rising global silver prices and a weakening rupee against the US dollar could significantly boost domestic returns, MOFSL said.
MOFSL concludes that the ongoing silver rally is structurally stronger than the speculative spikes of 1980 and 2011. MOFSL argues that price appreciation is now underpinned by "irreversible, material demand from the green energy transition and expanding technology sectors," creating a new, higher price baseline for the metal. With supply unable to keep pace, MOFSL projects silver prices could peak at $75 per ounce by 2026, with a sustained move towards $77 per ounce in 2027.
The global shift towards green energy is driving an unprecedented surge in silver demand, with the solar sector emerging as a dominant consumer of the white metal, Motilal Oswal Financial Services (MOFSL) said.
MOFSL noted that this accelerating industrial demand, combined with persistent supply shortfalls, marks a departure from previous speculative rallies—paving the way for a sustained structural bull market in silver.
In its report titled "Silver 2030 – The Unprecedented Rise," MOFSL projects that by 2027, solar panel manufacturers could require "more than 20 per cent of the current annual silver supply to meet installation targets." The solar photovoltaic (PV) segment alone is expected to consume over 200 million ounces of silver in 2025. This surge, the report says, is so strong that it is overpowering efforts to cut silver usage per panel—what MOFSL calls the “Thrifting Paradox.” Even as manufacturers attempt to use less silver due to soaring prices, the rapid expansion of global solar capacity continues to drive overall demand higher.
This boom in solar-driven consumption is the chief factor behind the ongoing market deficit, which MOFSL expects to persist for a fifth straight year in 2025, with a projected shortfall of about 118 million ounces. Supply constraints are deepened by the nature of silver production—around 75 per cent of global output comes as a by-product of mining other base metals like copper, lead, and zinc. As a result, silver output cannot be scaled up quickly in response to rising prices.
Beyond solar energy, silver’s indispensable role in other green technologies is adding to the pressure. The electrification of transport is one such driver, with each electric vehicle (EV) consuming 25 to 50 grams of silver—far more than a conventional internal combustion engine vehicle. The report highlights that silver demand from the automotive sector is likely to triple by 2040. Meanwhile, electronics remain silver’s largest industrial consumer, buoyed by the rollout of 5G networks, AI hardware, and next-generation consumer devices.
For Indian investors, MOFSL noted that the investment case is "substantially amplified by foreign exchange dynamics." A combination of rising global silver prices and a weakening rupee against the US dollar could significantly boost domestic returns, MOFSL said.
MOFSL concludes that the ongoing silver rally is structurally stronger than the speculative spikes of 1980 and 2011. MOFSL argues that price appreciation is now underpinned by "irreversible, material demand from the green energy transition and expanding technology sectors," creating a new, higher price baseline for the metal. With supply unable to keep pace, MOFSL projects silver prices could peak at $75 per ounce by 2026, with a sustained move towards $77 per ounce in 2027.