Operators of large photovoltaic, wind and hydroelectric power plants receive subsidies from the federal government. Because the electricity prices are now higher than the fixed remuneration, around 15 million francs flow back to the federal government every month. This is likely to remain so for a while.
Because electricity prices have risen sharply, subsidized plant operators now have to pay money to the state (solar power plant on the roofs of a Migros distribution center in Neuendorf).
Operators of subsidized production facilities were surprised when they received an invoice from Pronovo. The company handles the promotion of renewables on behalf of the federal government. Until now, the electricity prices have been so low that the operators have received money from the feed-in tariff (KEV) every year. Repayments were therefore not an issue at all. KEV pays the difference between the average exchange electricity price and the agreed rate of remuneration. In this way, the federal government wants to promote the energy transition.
The market price reached a low point in 2020: At that time, a kilowatt hour cost just 1.8 centimes. Since then, prices have risen significantly and are now at record levels. At the end of 2021, the reference market price for photovoltaic systems was 23.7 centimes per kilowatt hour. The electricity price has reacted to the increased oil and gas prices. As a result, for 10 percent of the KEV recipients, the reference market prices are currently above the guaranteed remuneration rate, according to the Federal Office of Energy (SFOE). This affects operators who market their electricity directly. In addition to photovoltaics and wind power, the subsidized systems also include biomass, hydropower and geothermal energy.
46 million francs back to the federal government
The repayments from the system operators give: Last year, 46 million Swiss francs flowed into the network surcharge fund. Premiums skyrocketed in the fourth quarter in particular. The monthly repayments amounted to 15 million Swiss francs. The experts at the SFOE expect that the price of electricity will remain high in the current year. In the first quarter, the reference market price rose again slightly. There are no official figures on repayments in the first months of 2022. If electricity prices remain high, an estimated CHF 180 million will flow into the fund in the current year. After all, that is around 10 percent of the annual turnover of the network surcharge fund.
With 7 million Swiss francs each, hydropower and biomass plants made the largest contribution to repayments in 2021. The amounts for wind and solar energy are much smaller. The legislator has capped the payment. If electricity prices are higher than the feed-in tariff, plant operators are not allowed to make a profit.
Investors who want to benefit fully from the market price must exit the KEV. According to the federal government, there are individual operators who have taken this step. However, they are then no longer allowed to return under the protective hand of the state.
The federal government introduced the feed-in tariff in 2009. No new systems have been included in the KEV since last year.
New funding system requires more money
The fact that the federal government is pleased about the windfall also has something to do with the new funding instruments that Parliament has decided on. The subsidy system will be changed: away from the feed-in tariff towards investment contributions. These can cover up to 60 percent of the investment costs. According to the SFOE, more money is needed for the new funding system. Therefore, the additional income due to the high electricity price comes at just the right time.
The repayments could have another effect. Parliament is currently discussing how Switzerland can expand its production capacities more quickly in order to prevent a power shortage. A part of the electricity industry would like to go back to feed-in tariffs. The new model is called a sliding market premium. The main difference to the feed-in tariff is that the tariff is not determined by the state but through auctions. The lavish repayments should now give a boost to those forces in Parliament who are campaigning for a market premium.