I have not investigated deeply that topic before but my understanding is that the silver cost on solar modules is about 2.65 ¢/watt at 75$ silver.
But it was 1 ¢ at 30$ silver ...
So the way we can look at it is that from 2024 to now it costs an additional 1.7 ct to solar producers.
That would explain why Chinese solar module manufacturers plan to increase prices 1 to 3 cts in 2026 (their margins are very slim in the 1 to 6 cts region).
Info is hard to find on that topic but I know those companies are actively exploring alternatives notably copper based. So between price increase and switch to another metal, hard to know how elastic solar induced silver demand is …
I’m also with Daqo, I think it’s the best prepared when the cycle turns around. In addition polysilicon prices have been increasing materially in the last months, so we might see Daqo breaking even in Q4 or Q1. Then on top it has a massive net cash position as you mentioned.
I am not trying to call short-term moves. Rather I think this is a great opportunity medium to long term, and there is a decent chance the move up continue this year for the sector.
But as highlighted at the end of the article, I flagged that it may need to correct a bit more in the short term.
At what silver price would the solar makers find it difficult to earn a decent profit?
I have not investigated deeply that topic before but my understanding is that the silver cost on solar modules is about 2.65 ¢/watt at 75$ silver.
But it was 1 ¢ at 30$ silver ...
So the way we can look at it is that from 2024 to now it costs an additional 1.7 ct to solar producers.
That would explain why Chinese solar module manufacturers plan to increase prices 1 to 3 cts in 2026 (their margins are very slim in the 1 to 6 cts region).
Info is hard to find on that topic but I know those companies are actively exploring alternatives notably copper based. So between price increase and switch to another metal, hard to know how elastic solar induced silver demand is …
Hope that helps.
Interesting article that dropped yesterday on that topic Wissam: https://www.advisorperspectives.com/articles/2026/02/12/silvers-surge-brighter-future-solar
I’m also with Daqo, I think it’s the best prepared when the cycle turns around. In addition polysilicon prices have been increasing materially in the last months, so we might see Daqo breaking even in Q4 or Q1. Then on top it has a massive net cash position as you mentioned.
Nice work Fred. I love the thinking that long CSIQ is a "hedge" to being long DAQO! I've got some of that type of hedging in my book too!
Ahah. Yes that was a common occurrence joke on my first trading desk.
Thanks for the message in any case Karl and hope you enjoy the posts.
Great note Fred!
Hi Andrew, agreed.
I am not trying to call short-term moves. Rather I think this is a great opportunity medium to long term, and there is a decent chance the move up continue this year for the sector.
But as highlighted at the end of the article, I flagged that it may need to correct a bit more in the short term.
FSLR acting very poorly right now. Not a good sign for a sector leader to be looking unhealthy imo
Nice read as usual
Thanks Julien !