Swiss solar industry fears end of boom period

Demand for solar panels has increased in recent years Keystone / Gaetan Bally

Swiss solar panel company Mons Solar has filed for bankruptcy as the domestic industry faces a reduction in state subsidies.

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With the coronavirus pandemic and the energy crisis a few years ago, the market for solar systems experienced a veritable boom. Figures from the industry association Swissolar show that last year, over 300,000 solar systems were connected to the grid in Switzerland – around 55,000 more than the previous year.

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Where there’s high demand, there’s also plenty of supply, says Matthias Egli, Managing Director of Swissolar, the Swiss solar energy association. The industry has grown by around 50% annually over several years.

Numerous new companies have joined, and up to 60,000 systems are now being installed annually. This puts the expansion of renewable energies on track.

The construction of solar power plants is politically desired and therefore financially supported – by the federal government, cantons, and municipalities. Appenzell Ausserrhoden, for example, is directly involved in the construction of private systems.

This has motivated many people, says Oskar Fässler, an energy consultant with the private association Energie. “Thanks to the subsidies, there was a real additional boom – which has unfortunately now flattened out,” he told Swiss public broadcaster SRF. This is because financial incentives are diminishing.

Starting in September, the canton of Appenzell Outer-Rhodes will pay half as much as before. A solar system for a single-family home costs around CHF30,000 to CHF40,000. Previously, the federal government provided CHF5,000, and the canton provided the same amount.

Now, the canton will only pay CHF2,500. In addition, there are current legal uncertainties, forcing many companies to wait before investing.

Wave of bankruptcies?

This has a direct impact on solar companies. Order books are no longer full, price pressure is increasing, and competition is intensifying and Swissolar expects the boom to be over.

“In 2025, we may even expect declining numbers compared to the previous year,” said Egli. Many new providers have entered the market right now – at a time when the situation is becoming increasingly challenging.

The competition is palpable, and individual companies are coming under pressure. Besides Mons Solar, other companies could face financial difficulties. Is a wave of bankruptcies looming? That will only become clear in the coming months, says Egli. The Bankruptcy Office of the Canton of St Gallen stated in response to a query that it does not collect industry-specific figures.

Translated from German by DeepL/mga

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