In 2023, Swiss voters accepted a plan to provide subsidies to replace oil and basic electric heating with cleaner more efficient heating, such as electric heat pumps. The plan involved spending CHF 200 million a year on such incentives over a 10-year period starting on 1 January 2025. However, Switzerland’s federal parliament decided in December 2024 to cut the quantum of the subsidies in 2025 by one quarter, reported RTS.
This belt tightening by parliament has been severely criticised by politicians concerned about the environment who point out that the cut is also an affront to the democratic will of Swiss voters.
The Federal Council has said it is difficult to maintain all of these subsidies given the negative state of Switzerland’s public finances. However, its priority remains focused on replacing high emission heating systems.
According to Nordmann, a parliamentarian from the Socialist Party, the cuts are at odds with this priority. He would like to see faster action on the matter and described the move as short term politics.
Another challenge in Switzerland is the high cost of upgrading heating systems. In nations like Sweden where efficient heat pumps are ubiquitous, the installation cost is a fraction of what it is in Switzerland. For example, ground source heat pumps, the top home heating choice in Sweden, cost roughly CHF 17,000 (208,000 SEK). In Switzerland, a similar system could set a homeowner back CHF 50,000.
Differences in labour cost would only account for a few thousand francs of the difference between these prices, given how few man hours are involved in set up. Foreign equipment manufacturers forcing high prices on Swiss installation companies might account for some of the remaining difference, but grey market imports could potentially fix this. A lack of competition among installers might be another factor.
Switzerland’s high prices are a significant drag on the adoption of energy efficient heating, particularly when Switzerland’s high electricity prices are factored in. The additional costs of maintenance that come with all of the moving parts in heat pumps compared to the limited maintenance associated with gas and oil burners are another high cost in Switzerland.
Some companies that sell and install heat pumps, when pushed, will admit that economics of switching to a heat pump are marginal given the costs of installation and maintenance and the high price of electricity.
Politicians in Switzerland tend to overlook the impact of high Swiss prices on the energy transition. But applying subsidies to a market with structural issues might just push prices higher, undoing any incentive.
If a ground source heat pump cost CHF 17,000 in Switzerland a lot more of them would be installed, with or without subsidies.
The cost of solar panels in Switzerland is another problem. A more competitive efficient market could shave 30% to 50% of the price of solar panels and their installation, even after paying higher Swiss wages. With the internet, these comparative calculations are easily made. Finding a company in Switzerland offering competitive prices isn’t. In addition, oversizing solar installations in Switzerland is now considered a risky investment. The prices paid for injected electricity are falling, and increasingly few trust that grid operators won’t use their monopoly power to push prices lower.
More on this:
RTS article (in French) – Take a 5 minute French test now
For more stories like this on Switzerland follow us on Facebook and Twitter.
