The expectation and the number

For most of the past decade, silver's recurring deficit had one accepted explanation: solar. Photovoltaics was the metal's largest industrial end market, and the reasoning ran in a straight line — more panels, a tighter market. In 2026 that line broke.

According to the Silver Institute's World Silver Survey 2026, produced with Metals Focus, photovoltaic silver demand fell 6% in 2025 to 186.6 million ounces and is forecast to fall a further 19% in 2026, to roughly 151 million ounces — the largest annual decline on record for the sector. Total industrial offtake fell 3% in 2025 to 657.4 million ounces and is forecast to lose another 3%, to 639.6 million ounces, in 2026.

The deficit did not narrow. It widened for a sixth consecutive year, from 40.3 million ounces in 2025 to 46.3 million ounces in 2026.

Why solar consumes less silver

Silver was not designed out of the panel. What happened is thrifting — using less metal per unit — rather than substitution. Manufacturers print thinner conductive paste layers and lay contacts more precisely, because a high silver price compresses module margins. No commercial replacement of silver by another conductor occurred in 2026.

The distinction matters. Substitution would remove the metal from the chain permanently; thrifting is a response to price. Consumption per cell falls, but photovoltaics remains a meaningful consumer.

Where AI enters

Industrial demand has broadened. AI data centres, electrical transmission equipment and automotive electronics all continue to increase silver consumption. Oliver Turner, Executive Vice President of Corporate Development at Americas Gold and Silver, described the overlay in Crux Investor's report: "The old adage is copper is the highway, but silver is the glue."

The phrase is worth keeping — and so is precision, because the popular version of this story is wrong. World Silver Survey 2026 states plainly that these sectors do not yet offset the fall in solar demand; they remain too small. AI did not replace solar. It made industrial demand less dependent on a single industry, which is a different claim at a different scale.

What actually sustains the deficit

The answer sits on the supply side. Global mined silver supply rose 3% in 2025 to 846.6 million ounces — not enough to close the gap even with industrial demand falling. All-in sustaining costs for primary producers fell 1% to US$12.21 per ounce: with a high price, margins expanded while output did not follow.

The asymmetry is simple. A panel maker reduces metal use within one product cycle. A new mine needs exploration, permits, financing and construction, which takes years. While that holds, the market balance is set by the pace of new supply rather than by industrial demand forecasts.

The buyer has changed

The composition of demand is shifting too. Physical investment demand — coins, bars and exchange-traded product accumulation — is forecast to rise 20% to a three-year high of 227 million ounces. US retail demand is expected to rebound 57% after three years of decline. Exchange-traded product holdings total an estimated 1.31 billion ounces.

Industry used to be the marginal buyer, and industrial forecasts moved the price. Investors now absorb a visible share of the deficit, and because the silver market is far smaller than gold's, shifts in private buying register more strongly.

We draw no price forecast from this and give no recommendations. The mechanism is the point: if the deficit widens even as the largest industrial consumer posts a record decline, the constraint sits with mine supply — and that does not clear in one season.

Source: Crux Investor, "Solar Demand Falls 19% But Silver Deficit Widens, Shifting Focus to Mine Supply" — https://www.cruxinvestor.com/posts/solar-demand-falls-19-silver-deficit-widens-shifting-focus-to-mine-supply