2023-10-07 02:51:27
Energy transition in danger: Federal government should save Swiss solar industry
China dominates the global solar market. This is a strategic risk, say the Greens. Switzerland should therefore help to strengthen European industry.
In the future, solar modules will increasingly be manufactured in Switzerland – Meyer Burger develops in Thun, but produces abroad.
Photo: Keystone
The Swiss solar industry is more optimistic about the future than it was just a few years ago. In 2022, 40 percent more solar power flowed than in the previous year. The industry is also expecting further growth of 20 percent this year. The share of Swiss electricity demand is now a good 7 percent.
However, that is just the beginning. In order for the energy transition to be successful, the expansion of solar systems must be massively accelerated – that is the political consensus. However, the Greens see the ambitious goals of the Federal Council and Parliament at risk.
The reason: the enormous dependence on the Chinese solar market. China has been heavily subsidizing its solar industry for over fifteen years. More than 80 percent of newly installed solar panels worldwide come from China, a report from the International Energy Agency shows. This applies to all stages of production of solar modules.
And the proportion is expected to continue to rise in the next few years. Switzerland imports around 90 percent of its solar modules from Asia. “As long as solar panels come almost exclusively from Chinese production, Switzerland is taking a major strategic risk,” says Green Party National Councilor Franziska Ryser.
The federal government should convene a round table
The energy crisis and Europe’s feverish search for a replacement for Russian gas in the wake of the Ukraine war have shown what high dependency can mean. Something similar is also conceivable with photovoltaics. An escalation of the Taiwan conflict, a pandemic or a closure of trade routes: According to the Greens, such crises could endanger the Swiss energy transition. “We therefore have to significantly reduce our dependence on China,” says Ryser.
The Greens are proposing a “Green Deal” for the Swiss solar industry. They demand that the Federal Council should recognize Switzerland’s supply of solar power and the necessary solar modules as critical for security of supply. He should also convene a round table: the federal government, cantons and municipalities should develop an action plan with representatives from the industry and experts. The aim is not only to maintain Swiss solar production, but also to gradually expand it. Ryser submitted a proposal to Parliament last week.
As a first step, the Greens are proposing a purchase guarantee. In the future, at least 40 percent of solar modules from Swiss or European production should be installed in public sector orders. What additional measures are needed, such as increased cooperation with the EU or federal subsidies: Ryser does not want to anticipate this debate.
“An industrial policy is a prerequisite for the development of the solar industry.”
However, for Noah Heynen, head of the Swiss solar company Helion, it is clear: “An industrial policy is definitely a prerequisite for the development of the solar industry in Europe, but also in Switzerland.” Helion is the largest company in Switzerland for the planning and installation of photovoltaic systems.
In fact, the European solar industry and various European social associations have been working with the EU Commission for months to improve the framework conditions for photovoltaic production in Europe. These include: financial support for investments, energy price caps, purchase agreements for photovoltaics or taking the CO₂ footprint into account for imports.
Meyer Burger is building a factory in the USA
In Switzerland, on the other hand, there are no plans like in the EU. Heynen believes it is not very realistic to build a solar industry in Switzerland in the short term. Rather, it is important that things move forward in Europe – and that Switzerland is involved.
There are essentially three solar companies in this country, the largest is Meyer Burger, which develops solar modules in Switzerland but produces them abroad, previously in Germany. But this location is now facing new competition – in the west.
In the USA, President Joe Biden has passed the “Inflation Reduction Act”, a law that provides billions of dollars in tax credits to promote photovoltaics. Meyer Burger also wants to benefit from this. The company is building a large solar cell factory in Colorado, supported by government aid worth over a billion dollars. And Meyer Burger is not alone. There are over ninety new projects in the pipeline, with an investment volume of $90 billion.
Invest 6 billion euros per year?
The competition will therefore become even greater, especially since energy prices in Europe are much higher than in China and the USA. The European Photovoltaic Industry Alliance calculates: In order for Europe to compete with China, the EU must invest up to 6 billion euros annually over a period of eight to ten years. This is the only way to achieve the EU’s goal of at least 40 percent of newly installed solar technology coming from European production by 2030.
For National Councilor Ryser it is clear: “Without a reaction from Switzerland, the last remaining Swiss producers could disappear due to the unfair competitive conditions.”
However, industrial policy like the one in the EU is frowned upon in Switzerland, one of the most economically liberal countries in the world. This makes the decision made by Parliament in the autumn session all the more remarkable: Switzerland should support the domestic metal industry, so that it does not lose out against European competition, which benefits largely from EU subsidies.
“Such an industrial policy should be rejected.”
The decision was made possible because politicians from the SVP, FDP and center supported the measure. Are they now also helping the Swiss solar industry? National Councilor Christian Wasserfallen is one of these politicians. And his answer is clear: no.
The FDP politician does not consider the two cases to be comparable. The steel industry is about maintaining the absolutely necessary production in Switzerland. In the solar industry, on the other hand, they now want to seal off the market in order to allow local producers to emerge in the first place, with the aim of permanently favoring a single industry. “Such an industrial policy should be rejected.”
A quota for public contracts also contradicts the federal law on public tenders and therefore violates WTO regulations, according to Wasserfallen.
Production of a solar cell in the clean laboratory of the Center for Electronics and Microtechnology in Neuchâtel.
Photo: Thomas Egli
Diana Gutjahr also campaigned for the metal industry on the same level in the council. The SVP National Councilor is open to Ryser’s initiative. It is about the mandate for the Federal Council to develop measures against market distortion – not about the fundamental decision for or against an industrial policy.
“These measures can be varied,” says Gutjahr. She is thinking, for example, of correcting the federal energy strategy. While in Switzerland energy costs continue to rise due to surcharges, these are capped in the EU, and subsidized energy costs are still under discussion in the EU. According to Gutjahr, this is an important driver of distortion of competition.
The Federal Council is waiting
So the political debate is picking up speed. The Federal Council, for its part, currently sees no need for action. He first wants to analyze the effects of the various ongoing industrial policy support programs on Switzerland as a business location; the report should be available next year.
In any case, the solar industry is hoping for federal help. The trade association Swissolar writes: “A fundamental rejection of industrial policy interventions would be a missed opportunity in the area of security of supply.”
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