Why invest in solar energy in Switzerland?
What are the advantages of solar energy in Switzerland?
Solar energy is becoming increasingly important in Switzerland as a sustainable source of energy – especially in light of the recent sharp rise in electricity prices in Switzerland. Let’s take a look at the numerous advantages of solar energy and the worthwhile aspects of investing in photovoltaics in Switzerland:
- Solution for rising electricity prices
- Environmentally friendly energy source
- Long-term investment opportunities
1. Fight against rising electricity costs
The recent increases in electricity prices in Switzerland have unsettled many consumers. Solar energy offers a solution here. By switching to photovoltaics, households and companies can stabilize their energy costs in the long term and reduce their dependence on expensive energy providers.
(Rp./kWh)
2. Environmentally friendly energy source
Solar energy is not only good for your wallet, but also for the environment. The use of photovoltaics significantly reduces CO2 emissions and actively contributes to environmental protection. The commitment to clean energy is firmly anchored in Switzerland and is further promoted through investments in solar energy.
3. Long-term investment
An investment in solar energy is not only an investment in the environment, but also in the future. Solar installations become valuable assets that increase in value over time. Switzerland offers attractive financing options to promote investments in renewable energies and make a profit at the same time.
How worthwhile is it to invest in solar energy?
Anyone can benefit from investing in PV panels, even if they don’t own a roof. There are various ways to benefit from the investment, from tax advantages and subsidies to lower electricity prices and direct annual returns.
1. Tax benefits and subsidies
In Switzerland, there are various tax benefits and incentives for homeowners who invest in photovoltaic (PV) panels to promote the use of renewable energy and reduce dependence on conventional energy sources. However, tax benefits and regulations can vary from canton to canton and municipality to municipality. Here are some common tax benefits associated with investing in PV panels:
- Federal tax incentives:
- Homeowners can deduct the costs of installing and maintaining PV panels from their taxable income.
- The depreciation or amortization of the PV system can also be considered a deduction.
- Cantonal and municipal tax incentives:
- Some cantons and municipalities offer tax breaks or credits for homeowners who install PV systems. These incentives can vary depending on the region and specific regulations.
- Support programs for renewable energies:
- Although not directly tax-related, homeowners can benefit from feed-in tariffs or incentives offered by energy suppliers for the surplus electricity generated by their PV systems and fed into the grid.
- Energy efficiency programs:
- In some regions, energy efficiency programs or initiatives may provide further incentives or subsidies for homeowners who invest in renewable energy technologies, including PV panels.
Advice for tax and energy authorities:
It is important for homeowners looking to invest in PV panels to contact tax authorities, energy agencies or local municipalities to understand the specific tax benefits, rebates or credits available in their area. These agencies can provide accurate and up-to-date information on tax benefits, eligibility criteria and the application process for incentives related to solar installations.
As tax benefits and incentives can change and may have specific eligibility criteria, it is advisable to seek advice from tax professionals or energy agencies to maximize the benefits of investing in photovoltaic panels and understand the financial implications.
2. Profitability for tenants through cheaper electricity
Tenants in Switzerland can also invest in solar energy, but the process and considerations may differ compared to homeowners. Tenants can participate in solar energy projects in various ways:
- Cooperation with landlords – consent and agreement:
- Tenants interested in installing solar panels on a rented property will need the landlord’s consent and a clear agreement setting out responsibilities, costs and benefits.
- The discussion of potential benefits of solar installations such as reduced electricity bills or increased property valuation could encourage landlords to consider the proposal.
- Community solar energy projects Participation in collective initiatives:
- Tenants can participate in community solar energy projects, where a shared solar installation provides electricity for several households.
- These initiatives allow tenants to benefit from solar energy without having solar panels installed directly on their rented property.
- Financing through third-party leasing or power purchase agreements (PPAs):
- Some companies, like Solergy, offer third-party financing options where tenants can lease solar panels or enter into Power Purchase Agreements (PPAs) to gain access to solar energy with no initial installation costs.
- Through leasing or PPAs, tenants pay for the solar energy generated without owning the panels themselves.
3. Profitability for the investor
Whether you own a home or not, you can be part of the solar revolution in Switzerland while also profiting from your investment. Investing in photovoltaic (PV) projects in Switzerland can be financially rewarding, but there are several important considerations and profitability metrics that should be evaluated before making an investment decision. If you decide to invest in PV projects with Solergy, we will provide you with a detailed analysis of these considerations and the expected metrics for each project. In general, you can achieve an annual return of 8% on our solar projects.
Considerations:
a) Solar potential and location:
Evaluation of the solar radiation and suitability of the location for optimal energy generation. Certain regions of Switzerland receive more sunlight, which can influence the efficiency of the project.
b) Project scope and size:
Determining the scope of the PV project (private, commercial, large-scale system) based on available space and investment capacity.
c) Regulatory and legal framework conditions:
Understanding local regulations, permits, grid connection procedures and available incentives for PV projects. Compliance with laws and regulations is important.
d) Financing options:
Investigation of financing options such as loans, subsidies, feed-in tariffs or power purchase agreements (PPAs) to finance the project. Evaluation of capital costs and potential returns.
e) System design and technology:
Consideration of system design, panel types, inverters and other components. Investing in high-quality and efficient technology can influence long-term performance.
f) Maintenance and operation:
Evaluation of ongoing maintenance costs, warranties and operating expenses to ensure the longevity and efficiency of the system.
Profitability ratios:
a) Return on investment (ROI):
Calculating the ROI by comparing the initial investment costs with the projected income from electricity sales or savings over the lifetime of the project.
b) Amortization period:
Determining the time it takes for the investment to pay for itself based on the income generated or savings from the PV project. A shorter payback period means higher profitability.
c) Electricity generation costs (LCOE):
Assessment of the LCOE, which represents the average cost of electricity generation over the system’s lifetime. A lower LCOE indicates higher profitability.
d) Internal rate of return (IRR):
Evaluation of the IRR to assess the profitability of the project by calculating the expected return on invested capital over its lifetime.
e) Net present value (NPV):
Calculating the NPV to assess the profitability of the project by comparing the current value of cash inflows (revenues) and outflows (investments and expenses) over time.
Okay, but what about the environmental impact of manufacturing and disposing of solar modules?
The production of solar panels involves several stages that require energy, resources and materials. However, when assessing the environmental impact, it is important to consider the entire life cycle of solar panels, including manufacturing, transportation, installation, operation and disposal or recycling at the end of their life.
1. Environmental impact of solar panel production:
Energy intensity:
Production: The production of solar panels requires energy-intensive processes such as the refinement of raw materials (silicon, metals), the production of semiconductor wafers and the assembly of panels. However, advances in technology have significantly reduced the energy intensity of solar panel production over the years.
Extraction of raw materials:
Silicon: the main component of most solar panels. The extraction of high-purity silicon can require energy-intensive processes such as mining and refining.
Metals and other materials: Other components such as aluminum frames, copper and glass also contribute to environmental pollution through mining and processing.
Greenhouse gas emissions:
Manufacturing processes can generate greenhouse gas emissions, especially during energy-intensive phases. However, the emissions associated with the production of solar panels are significantly lower compared to the emissions avoided by using renewable energy throughout their lifetime.
(gCO2 per kWh in the full lifecycle)
2. Energy balance of solar panel production:
The energy balance of solar panels refers to the ratio between the energy generated during their operating time and the energy required for their manufacture, transportation and disposal or recycling.
Energy payback time (ERZ):
The ERZ measures the time it takes for a solar panel to generate the same amount of energy that was used to produce it. Modern solar panels have significantly reduced their ERZ due to technological advances and is usually between 1 and 2 years for most panels. This means that after this time, the solar panel will have generated more energy than was used to produce it.
Life cycle assessment (LCA):
LCAs assess the environmental impact of a product throughout its entire life cycle. Studies show that despite the energy-intensive manufacturing phase, the overall footprint of solar panels is significantly lower compared to the emissions avoided by generating renewable electricity.
If you would like to find out more about the energy balance of solar installations, visit the Swissolar website (www.swissolar.ch). There you will find information, guidelines and studies on the subject of solar energy, including reports on the energy balance and life cycle analysis of photovoltaic systems in Switzerland.
3. Recycling of solar panels
Switzerland has taken proactive measures to address the recycling of solar panels and has regulations in place to regulate their responsible disposal at the end of their life. A solar panel can be recycled to a high percentage, often over 90%.
Recycling percentage by component
Glass: The glass component of a solar panel is highly recyclable, and recycling plants can often recover nearly 100% of the glass for reuse in new panels or other applications.
Silicon cells: Silicon-based cells, which contain valuable materials such as silicon wafers, can be recycled, but the process might not recover 100% of the material due to losses during the recycling process.
Metals: Materials such as aluminum frames and copper wire are highly recyclable, and almost 100% can be extracted and reused, contributing to high recycling rates.
Plastics and other materials: Some plastic components and materials in solar panels can be recycled, but not all plastics may be easily recyclable, which affects the overall recycling percentage.
Ongoing efforts and progress
Efforts are underway in the solar industry to improve recycling technologies and processes. Research and development initiatives are aimed at improving the efficiency of recycling methods, increasing the recoverability of materials and reducing waste during the solar panel recycling process. It is almost certain that as a result of these ongoing research efforts and regulations in Switzerland, solar panels installed today can and will be fully recycled at the end of their life.
Conclusion: Benefit now from the advantages of solar energy
Although the production of solar panels has an environmental impact, advances in technology, improved manufacturing processes and falling solar panel costs have significantly reduced this impact over time. When the entire life cycle is considered, solar panels help reduce greenhouse gas emissions and are an essential part of the transition to clean, renewable energy sources. Well-maintained solar panels could generate electricity for 30 years or more, albeit at a slightly lower efficiency. Efforts are ongoing to further minimize environmental impact through material recycling, technological innovation and cleaner manufacturing processes.
Investing in solar energy in Switzerland not only offers economic benefits, but also an opportunity to support the environment and invest in a sustainable future. As a financing partner for solar energy, we support you in taking advantage of the opportunities offered by this renewable energy source.
