Solar Plants in Switzerland – A Legal Overview

As of 1 January 2025, the net-zero target for 2050 will become law in Switzerland as part of the Swiss Climate and Innovation Act. The building sector is playing a key role in achieving this goal and in climate protection in general given that Swiss buildings account for about one third of Switzerland’s CO₂ emissions and consume approximately 40% of the total energy demand in Switzerland.

Because electricity consumption will increase significantly in most households and businesses in the future due to the use of heat pumps and electromobility, photovoltaic systems and solar plants in general have been identified as a promising way to tackle this problem. The Swiss Federal Office of Energy expects more than 40% of future electricity demand to be met by photovoltaics by 2050.

At the federal level, the solar express (ie, “urgent measures for the short-term provision of a secure electricity supply throughout the winter”) was enacted in autumn 2022 and includes obligations to install solar plants (photovoltaic systems or solar thermal systems) on the roofs or facades of new buildings. These measures will remain in force until 31 December 2025, but will come permanently into force with the Federal Act on a Secure Electricity Supply from Renewable Energy. If approved by a referendum in June 2024, the Act will enter into force on 1 January 2025.

At the federal level, obligations relating to the installation of solar plants only apply to new buildings. In practice, however, there is a high level of interest in the installation of solar plants (especially photovoltaic systems) on existing buildings.

At the cantonal level, there are already various statutory obligations to install solar plants. Moreover, further measures in this respect are being discussed on an ongoing basis.

The Swiss Spatial Planning Act stipulates that in construction as well as agricultural zones, building permits are not required for “sufficiently unobtrusive” solar plants on roofs. Instead, the competent authorities must be notified about these installations, and the cantons or municipalities can extend this notification procedure to other solar plants (eg, façade installations).

According to the Swiss Energy Act, the local grid operator must generally pay “appropriate remuneration” for surplus solar electricity to the owners of photovoltaic systems. Apart from certain legal requirements, each grid operator can determine the remuneration. As a result, remuneration currently varies considerably across Switzerland. However, the Federal Act on a Secure Electricity Supply from Renewable Energy, as mentioned above, seeks to achieve some harmonisation in this regard.

Subsidies are another incentive. Photovoltaic systems are promoted nationwide by means of non-recurrent remuneration. The amount of this remuneration and the procedure that must be followed to obtain it vary depending on the photovoltaic system in question. Moreover, there are other promotional programmes offered by certain cantons, municipalities and energy suppliers.

Lastly, there are also tax incentives for the construction of photovoltaic systems.

In principle, the self-consumption of electricity (ie, consuming electricity at its place of production) is cost effective. When purchasing electricity from the local grid operator, the electricity price includes grid utilisation costs and duties. With self-consumption, no grid utilisation costs and duties need be paid.

There are various ways operationally and legally to implement the construction and operation of a photovoltaic system. These include the following.

The building owner will sell self-produced electricity to its tenants and will establish a self-consumption association (Zusammenschluss zum Eigenverbrauch, ZEV) to this end. Both the building owner and tenants benefit from this practically and financially. The supply of electricity to tenants, however, is subject to tenancy law, which means that various tenancy law requirements must be taken into account. In particular, there are legal restrictions for calculating the electricity price that can be passed on to tenants.

Public-law legislation also plays a role in contractual agreements regarding photovoltaic systems. For example, because Switzerland’s electricity market is partly liberalised, large-scale customers (ie, companies whose consumption exceeds 100,000 kWh per year) can freely choose their electricity supplier and withdraw from a self-consumption association at any time.

As an alternative to the self-consumption association, solar electricity can be sold to the grid operator, which in turn sells it to the tenants. This, however, depends on the local grid operator.  

Another option is for the building owner to make the roof or façade area available to a third party. This can take the form of a lease agreement or – more often – a contracting agreement. The contractor (usually, an energy-service provider) plans, finances, builds, operates and maintains the photovoltaic system and usually delivers electricity to the building owner. Some contractors also offer additional services as part of ZEV management.

Typically, the contractor will want to establish an easement for the use of the roof, façade and/or the respective photovoltaic system to provide for “right in rem” protection. There are various legal questions regarding the separation of ownership in the building and the photovoltaic system as well as the possibility to separately pledge the photovoltaic system (eg, to a bank). In the absence of a crystal-clear definition at the level of Federal law or case law of the Federal Supreme Court, various cantons have established their own approaches. It is recommended that the contract parties have a mutual understanding of the ownership situation, which is clearly reflected in the contract.

As a further possibility, a building owner builds the photovoltaic system and then makes it available to a third party by concluding a usufructuary lease agreement (Pachtvertrag, similar to a normal lease agreement). In this scenario, the photovoltaic system is legally owned by the building owner.

The entry into force of the Federal Act on a Secure Electricity Supply from Renewable Energy will give further impetus to the expansion of solar plants. Irrespective of the outcome of the referendum in June 2024, the demand for electricity will increase steadily and subsidy programmes are already in place. The installation of solar plants will continue to increase in the future, but a clear contractual definition of the rights and obligations of the parties involved in a solar plant is essential.