Financing a photovoltaic system: 10 key questions

Due to high prices and the threat of scarcity on the energy market, more households want to generate some of the electricity they need themselves. But from choosing the right solar (photovoltaic) panels to delivery times, there are several things to consider. This much is certain: producing your own electricity saves money. What to consider when installing a photovoltaic (PV) system, and how you can finance it.

PV systems are currently in high demand – they convert solar energy into electricity. Per kilowatt (kW) of installed capacity, a system costs about CHF 2,700. For a private residential building or single-family home, experts today recommend a system of around 50 m2 (= 10 kW output). Such a system would cost around CHF 27,000. Due to inflation and supply bottlenecks, prices are likely to be slightly higher in coming years. On the other hand, homeowners can deduct a subsidy of approximately 15–20 percent of the installation costs (one-off payment), which includes all technically required components and their installation.

Costs vary depending on the building and the size of the PV system.

If you want to harness the power of the sun for your home with a PV system, you first need to invest a certain amount. Only then will you be able to enjoy the full financial benefits of the system.

You can purchase a PV system in the following ways:

Buying a PV system

A range of options are available for financing the purchase of a PV system, for example, there are state and private subsidies from companies. Solar power companies often offer financing options in partnership with banks, for example, solar credits, i.e., credit made available specifically for the installation of a PV system. Such credits are also known as solar loans. A PV system can also be paid off in monthly installments – much like renting. The advantage of this approach is that the PV system will belong to you after a certain period of time.

Often, however, buying a PV system alone is not enough. In addition to the purchase price, installation, permits and maintenance must also be factored into the costs.

Leasing a PV system

Leasing a PV system can also be advantageous. Leasing means you won’t have to make all the payments at once and can budget better. In contrast to renting, a leasing contract can be structured more individually.

Another option besides leasing is a so-called solar subscription. This option means you don’t even have to buy or lease the PV system, but instead pay a usage fee. The advantage is that you usually only pay for the electricity you use. As with leasing, however, you have no ownership rights while using the system.

As everywhere in the area of building materials and technology, you should expect supply bottlenecks. In addition, installers and companies specializing in renewable energy are near fully booked due to the high demand. “You should expect waiting times of about six months, and the waits are growing longer," says David Stickelberger, Managing Director of Swissolar, the Swiss Association for Solar Energy. The best person to contact is a specialized installer who will supply the entire system and take care of all connections and reporting requirements.

Different types are available on the market in all possible shapes, sizes and colors. The most affordable are the standard panels, which are mounted on an existing roof as an on-roof solution. Solar panels, which effectively function as the roof, and offer weather protection (in-roof installation), are more expensive. There are several well-known Swiss manufacturers who manufacture and deliver panels for almost every type of roof. Solar tiles, panels integrated into the façade or special designs are also available on the market.

For a long time, a south-facing roof was considered the ideal orientation. But experts today agree that overly broad recommendations are not helpful. Alternatively, vertically aligned solar panels, also called solar façades, are a worthwhile investment. They offer the benefit of supplying a constant amount of electricity throughout the year. Solar panels are now so cheap that they make sense even if a roof is not facing in the ideal direction. “Solar panels on roofs that face east and west can also be very effective,” says expert David Stickelberger. This will provide a good yield of solar energy throughout the day. Tip: On the official website www.sonnendach.ch, you can easily check which areas of the roof of your house are suitable. Of course, the solar panels should not be heavily shaded by trees or neighboring buildings.

Yes. The service life of the panels is at least 25 years, and maintenance and other operating costs are minimal. A full-cost calculation shows that self-generated electricity costs about 14 centimes per kWh for private installations of around 50 square meters in size, as described above. For larger installations, the price per kWh can even fall below 10 centimes. By way of comparison, to date private households have paid an average of about 21 centimes for grid electricity from the power company, and next year these costs will rise to around 28 centimes due to inflation. Conclusion: generating electricity from your own rooftop definitely makes sense economically.

A photovoltaic system produces electricity for your own use, and remuneration is paid for any excess that is fed into the public grid. Due to current price developments, energy companies are increasing these remunerations, though there are large regional differences. Some electricity companies already pay 27 centimes per kWh of PV electricity, for example.

Around a third of homeowners are already adding battery storage to their photovoltaic system. As technology in this area continues to improve, battery storage is becoming cheaper. You should reckon with additional costs of several thousand francs, depending on the capacity of the storage system. A storage battery allows you to increase your personal consumption. Put another way, while most private households produce about 30 percent of their energy needs themselves (without a battery), storage enables them to produce 60 percent or more. This makes sense both ecologically and economically. The cost-effectiveness of a battery will improve significantly if prices for grid electricity continue to go up, as is currently the case. “However, it would be wrong to think that a PV system with a battery is always an effective hedge against a power failure,” says expert David Stickelberger (see “The vision of energy self-sufficiency” below).

“Load management” is required for optimum control of electricity production during the day and to meet the demand for households, heat pumps, electric vehicles, etc. This digital system optimally coordinates the individual components, including distribution to a battery storage system in the house. Smart load management can significantly improve the share of consumption from your own power. Electric vehicles now also offer bidirectional charging (the ability to charge and dispense electricity), which makes networking particularly interesting. In this way, the peaks generated during midday sunshine can be used and stored to best effect. Modern systems even consider weather forecasts and plannable household power demand.

Photovoltaic systems are promoted at the federal level with a one-time payment (Einmalvergütung, EIV), which covers up to 30 percent of investment costs. For small installations with less than 100 kW, you can apply for a subsidy at Pronovo after initial setup (see links below). As a rule, the installer will attend to all the formalities. In addition, many cantons, municipalities and cities offer other funding programs. Investments in renewable energy are also one-hundred-percent deductible from income taxes.

Not least due to rising energy prices, small or mini PV systems are currently enjoying great popularity. These “miniature power stations” usually consist of two solar modules, an inverter and cables, and cost between CHF 600 and 1,800. Every PV system requires an inverter to convert the current generated by the panels into direct current. According to the Federal Inspectorate for Heavy Current Installations (ESTI), the total output of a small system may not exceed 600 watts. The electricity generated is fed directly into the building’s power system. However, homeowners are advised to install a larger system if possible.

Please note: there is no public subsidy for small installations that produce less than 2 kilowatts, and installation requires the consent of the homeowner or condominium community, since the outside balcony is not part of the rented property or exclusive usage area. In addition, any historic preservation rules should also be taken into account.

Since the price explosion for oil and gas and the concern about an energy shortage, we see a growing desire to make a house as self-sufficient as possible. Most experts already agree that energy production will be more decentralized in the future; some of this energy will be PV electricity generated from the many roofs throughout Switzerland. “However, it is a popular misconception that a household with its own PV system, including electricity or battery storage, is protected against a blackout,” emphasizes David Stickelberger of Swissolar. Such protection is technically very demanding; it requires a retrofit with special components, which are currently hard to come by on the market. A vision of fully self-sufficient houses makes neither economic nor ecological sense. The future lies more in improved interconnection of energy production and energy consumers. This includes regional exchange, for example, with local energy networks, etc.