Silver demand from the solar photovoltaic sector is expected to reach 310 million ounces in 2026, according to the Silver Institute's mid-year update. That is 18% above 2025 levels and accounts for 37% of total industrial demand. Each GW of installed solar capacity requires roughly 20 tonnes of silver.
China installed 98 GW of new solar capacity in Q1 2026, up 45% from Q1 2025. The global total for the year is projected at 650 GW. Silver loadings per cell have declined 8% due to efficiency improvements, but the volume growth in capacity far outweighs the intensity reduction.
Despite this structural demand growth, silver prices have fallen 3.5% week-over-week. The disconnect is explained by macro factors: the strong dollar, hawkish Fed, and weakness in other industrial metals (copper down 1.34% on the week) are dragging silver lower.
The physical market remains tight. LBMA silver inventories declined to 910 Moz, the lowest level since 2023. The forward curve remains in backwardation through December, indicating that physical availability is constrained in the near term.
The fundamental case for silver remains intact. Solar demand is a structural growth story, not cyclical. Buyers with H2 coverage needs should use the current pullback below $65 to build positions. The physical market tightness adds a supply risk premium not reflected in futures.