Photovoltaic: Small producers protected from negative prices

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Consequence of the vote on electricity supply: the resumption of current injected into the network will be remodeled. But the price will never be negative, contrary to what Groupe E mistakenly suggested to companies.

The recovery price, unless agreed, will be quarterly, national and guaranteed positive or zero, thanks to still indicative minimums. © Alain Wicht

The recovery price, unless agreed, will be quarterly, national and guaranteed positive or zero, thanks to still indicative minimums. © Alain Wicht

Published on 06/16/2024

Estimated reading time: 5 minutes

An employee of a Friborg company almost failed when he received a letter from Groupe E this week. The energy company warned the company, which invested more than a million francs in its solar installation. The message: the prices for resuming electricity injected into the network will change, in the wake of the vote of June 9 on electricity supply. Prescriptions will be adapted. There would be “a risk”: “a negative price during the summer period”, we read in this letter.

“The nerve! People are going to install solar panels and, on top of that, they will have to pay for the electricity they put back into the circuit!” chokes the employee of this company. Contacted by FreedomGroup E makes its mea-culpa and claims to have to “correct the content of this letter” addressed to twelve owners of large installations.

“It is not expected that this tariff will be negative”
Nathalie Salamin

“The takeover price will be based on market prices, with a floor or minimum price set by order, corrects Nathalie Salamin, communications manager of Groupe E. To our knowledge, it is not planned that this price will be negative.”

A seasonal price

For the moment, we only have documents put out for consultation last February. In particular a draft revision of the Energy Ordinance (OEne). No substantive change: the take-over price depends first of all on the agreements that producers conclude with their network manager. In the absence of an agreement, the amount per kWh that they will receive will be fixed according to a reference market price, calculated on a quarterly scale – this is the main new feature. This price will be uniform in Switzerland. It will be established according to the price of the electricity exchange day-ahead (of the day, for delivery the next day) observed on the national market, indicates the explanatory report which accompanies the order.

The price day-ahead is very variable and sometimes negative. For example, it reached – 9.1 cents/kWh on April 14, or – 14.5 cents on May 12 (in euro cents), but for only a few hours. “It is really very difficult to imagine a price that would remain negative for a hundred days,” assures Wieland Hintz, responsible for solar energy at the Federal Office of Energy. The quarterly tariff, which should prevail most of the time, therefore protects producers from this risk and fluctuations. The Federal Office of Energy calculated the average quarterly price for the last six years: if it had been applied, operators would have received 10.3 cents/kWh, excluding VAT.

Guaranteed minimum

But the Federal Council has also provided for minimum remuneration. They protect producers “in the event of low market prices” (or negative), because they are high enough to allow the depreciation of reference installations (15 and 90 kW of power) over their lifespan, estimated at 25 years.

Below 30 kW of power, the minimum rate provided for at this stage in the order is 4.6 cents/kWh, excluding VAT. This power category includes individual houses. Between 30 and 150 kW (i.e. between approximately 150 and 750 m2 panels), we are rather talking about installations operated by companies. Focusing on self-consumption, the explanatory report estimates that “the investment can be amortized in eight years”. The minimum tariff is thus set at 0 cents/kWh. On the other hand, if the company injects all of its production into the network, the minimum recovery price is currently set at 6.7 cents/kWh, excluding VAT.

What about installations of more than 150 kW and up to 3 MW? “For this category, the network operators remain responsible for the recovery,” says Wieland Hintz. Without agreement, the quarterly average price applies, without a minimum trade-in price. But both parties will be more inclined to agree on a stable and predictable price.”

In the system that has prevailed until now, network managers themselves set their tariff for the recovery of electricity injected by individuals (unless specifically agreed).

Not definitive

The consultation has been closed since May. Conclusion: “Roughly speaking, network managers find that these minimum tariffs should not be changed. Green or left-wing associations want more. Swissolar and the Association of Swiss Electric Companies are in between,” notes the specialist, emphasizing that we will have to wait for the final version of the ordinance to know the final prices.

The adoption of this ordinance should take place this fall. Its entry into force is scheduled for 1er January 2025. “But this is the subject of discussion,” tempers Wieland Hintz.

Contested hypotheses

The calculation of the minimum recovery prices envisaged by the Confederation, based on depreciation over 25 years, includes aid (the single payment), as well as tax deductions or maintenance costs. It also takes into account assumptions that Swissolar, the Swiss association of solar energy professionals, questions.

The price of electricity drawn from the network is thus estimated at 29 cents/kWh for individuals (including VAT) and 23.6 cents/kWh for businesses (excluding VAT). These figures are calculated over several years, including during “Putin peaks”: “It is obvious that prices on the European market will soon fall. And the savings made by self-consumption too!” notes David Stickelberger, deputy director of Swissolar.

The association also judges that the share of self-consumption retained (40% for individuals and 60% for businesses) is too high. As a result, the minimum prices proposed push installations to be designed for own consumption rather than for injection, and therefore general supply. In short, Swissolar recommends a minimum recovery tariff of 8 cents/kWh, 4 cents/kWh and 7 cents/kWh, instead of the 4.6 cents/kWh, 0 cents/kWh and 6.7 cents/kWh put out for consultation.

Wieland Hintz, responsible for solar energy at the Federal Office of Energy, notes, however, that managers also pay producers guarantees of origin. The Federal Council estimates them at 2.4 cents/kWh for individuals and 1.7 cents/kWh for businesses. These amounts are in addition to the minimum recovery rates. “We then get closer to the amounts proposed by Swissolar,” notes the specialist.

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