A recent report from the Swiss Federal Council details the difficult path of efforts to rebuild the domestic PV industry and concludes that plans to create a European supply chain could be too expensive.
The Swiss government has submitted a report reduce the country’s “huge” dependence on China’s solar industry. The Federal Council said the report shows “how Switzerland has so far supported efforts to rebuild a European photovoltaic industry, how this could be done even more in the future and what environmental, economic and social consequences this would have.”
The report, which also takes into account developments over the past three years, comes to a different conclusion. The high dependence of Switzerland and all other countries on the Chinese solar industry is certainly recognized, but the report also points out that Switzerland is benefiting from “low prices caused by a huge oversupply in the European market.”
Subsidies for setting up domestic module production “would be expensive in such an environment,” the report said. “No significant reduction in dependence can be expected, as Swiss photovoltaic module manufacturers would be dependent on raw materials from abroad.”
It stated that solar panels, “unlike essential goods such as food or medicine”, do not necessarily have to be available at all times. Nevertheless, it is important that the expansion in the medium and long term “protects against any risks of a possible technology shortage,” it added.
The report emphasized that Switzerland’s contribution to building a European PV industry would mainly lie in the field of research and development, where the country invests “a lot”.
The report also points to industrial aid in the United States, particularly the Inflation Reduction Act, as well as “several efforts in this direction” in the European Union. However, a May 22 report on the Swiss economy stated “that the negative effects of foreign industrial policy measures on Switzerland as a business location are limited.”
As early as September 2023, the Green Party faction in the National Council had called for a “Green Deal for the Swiss solar industry”, referring to the EU’s industrial policy plan. In November, the Swiss Federal Council announced that it had decided to “renounce corresponding industrial policy measures” and voted in favor of rejecting the Green Party’s proposal.
Swiss industrial policy is traditionally economically liberal. However, in the autumn of 2023, parliament voted in favor of supporting the domestic metal industry, which must resist competition that strongly benefits from EU subsidies.
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