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The great euphoria has passed – around 20 projects are still in the running. The question still remains as to whether solar systems will one day be profitable.
The Bernese electricity company BKW would like to build five to six large solar systems in the Jura and the Bernese Oberland.
These systems will one day help to supply Switzerland with additional electricity, especially in winter. This is the idea of the so-called Alpine Solar Express, which was approved by Parliament in autumn 2022.
Expensive winter solar power
However, the electricity from these systems has its price, as BKW boss Robert Itschner has to admit. “Electricity will be quite expensive – but we need it during the winter months. Because the winter gap is growing.”
This electricity is expensive because the systems are built in impassable terrain, high up in the mountains. However, thanks to the many hours of sunshine at altitude, these solar parks also provide significantly more electricity than comparable systems in the lowlands.
We don’t know whether it’s worth it – there is no experience with alpine photovoltaic systems.
In addition, electricity consumers support the systems financially via electricity prices – with up to 60 percent of the investment costs.
But even with that, it’s unclear whether the calculation will work, says Christoph Brand, head of the Axpo electricity company: “We don’t know whether it’s worth it – there’s no experience with alpine photovoltaic systems.”
Electricity prices back to pre-war levels
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The signs for the solar express have fundamentally worsened in recent months. At the moment, only about 20 specific projects are still somewhat on track: they have cleared the hurdles in community meetings, and building applications have now been submitted for nine of the projects.
When parliament passed the solar express in autumn 2022, electricity prices were very high. At this point, electricity from alpine solar systems would have been somewhat competitive.
However, the price of electricity has now fallen significantly – to the level before the major Russian attack on Ukraine at the end of February 2022. From today’s perspective, Alpine solar power will, conservatively estimated, be at least twice as expensive as the electricity traded on the electricity exchanges today.
Low electricity prices put pressure on returns
With the current low electricity prices, it will be more difficult to find buyers for Alpine electricity, says the head of the Graubünden energy group Repower: “And if you can’t realize the high price in the market, you might not do the project,” says Roland Leuenberger .
It is our responsibility to account for the costs.
Repower has submitted two building applications for an Alpine solar system. One system is planned in Laax, the other above Klosters. But the projects should only be built if they are economical, says Leuenberger.
Legend: Systems in the mountains are very complex to install, and the construction costs are correspondingly high, which in turn affects the price of electricity. Keystone/Gian Ehrenzeller
And from a purely legal perspective, Repower could pass on all costs for the system to its customers. The Repower boss says: “It is our responsibility to account for the costs.”
Different requirements
At BKW the starting position is basically the same, but BKW boss Itschner weighs the profitability differently.
We also see the investments as a contribution to security of supply in Switzerland.
The Bernese energy company will pass on the costs of Alpine solar systems to its 320,000 end customers, at least partially. But: “We also see the investments as a contribution to security of supply in Switzerland,” says Itschner.
However, not all initiators of Alpine solar systems have committed end customers like BKW or Repower. Rather, they have to sell all or part of the electricity on the open market. And the omens for these projects are currently bad because of the low electricity prices on the electricity market.
It could therefore be that some alpine solar systems fail not only because of resistance from the population, but also because there is simply no money to be made with them.