Why Swiss Industry Pays More for Electricity Than (Almost) Anywhere in Europe

Germany fears for the future of its industry. One argument looms large: energy and electricity costs are no longer competitive. In response, the government has launched a program that would cut industrial electricity bills by more than €10 billion a year.

Yet the highest electricity prices on the continent are not in Germany, but in Switzerland. That is the finding of our new international comparison of large electricity consumers, including companies in paper, glass and steel manufacturing, as well as chemical firms and large data centers. For our analysis, we compared data from the Swiss Federal Statistical Office with figures from the European Union and the United Kingdom.

The international comparison shows that electricity in Switzerland has long been expensive for large users and has become more so. A decade ago, industrial electricity prices were higher in Germany, the United Kingdom, Ireland and Italy than in Switzerland. By 2025, Switzerland ranked second only to the United Kingdom, ahead of all 27 E.U. member states. No other country in comparison has seen such a steep increase: prices have doubled in ten years.

At the other end of the spectrum are France and the Nordic countries (Norway, Sweden and Finland) where electricity remains relatively cheap. Their prices are comparable to those in non-European countries like China, the United States and Canada, where electricity cost around 8 to 9 euro cents per kilowatt-hour in 2024. Swiss prices are more than twice as high.

With prices exceeding 23 Swiss cents per kilowatt-hour, the United Kingdom ranks as Europe’s most expensive market. Its island geography, which limits integration with the continental grid, is one reason. Another is its heavy reliance on gas, which has become more costly since Russia’s invasion of Ukraine.

The results also reflect the extent to which many countries have deliberately shielded their industries from rising costs:

1. France has long had some of the lowest electricity prices for large consumers. Today, Swiss industrial electricity costs are roughly two and a half times higher than in France, up from a factor of 1.5 in 2015. One reason is that the French government required the state utility EDF to sell part of its nuclear power output to large consumers at 4.2 euro cents per kilowatt-hour through the end of 2025. About half of industrial electricity falls under this regime. A new system now applies: if market prices exceed 7.8 cents, half of the difference is reimbursed to customers; above 11 cents, the reimbursement rises to 90%.
2. In Germany, the increase in industrial electricity prices over the past decade has been comparatively moderate. One factor is that industrial firms have effectively been exempt from the electricity tax since 2024. Berlin is now planning an additional measure: a reduced industrial electricity price, retroactive to Jan. 1, 2026. The government would cover the gap between the market price and a target price of 5 euro cents per kilowatt-hour, though only for up to half of a company’s consumption. This target applies only to the wholesale energy price; network charges, taxes and levies are added on top. In return, companies must invest more in energy efficiency. Network charges are also set to be reduced across the board for 2026.
3. Across the European Union, many other member countries have adopted similar measures. Last year, the European Commission extended relaxed state aid rules through 2030, allowing member states to grant discounts of up to 50% on half of companies’ electricity consumption.

Network Costs Become the Problem

There are two main reasons why electricity prices in Switzerland exceed those in any E.U. country.

1. Switzerland has traditionally been skeptical of subsidies. While many E.U. countries have intervened to lower industrial electricity prices, Switzerland has largely refrained. That stance shifted slightly last year, when the government responded to a parliamentary request. In March 2025, it introduced temporary support measures for the iron, steel and aluminum industries, set to run through 2028. Under the program, the steel producer Stahl Gerlafingen will see its network costs reduced by 13.9 million Swiss francs, while Steeltec in Emmenbrücke could receive as much as 25.5 million. Even so, these sums are modest compared with the scale of subsidies under discussion in Germany and are unlikely to significantly reduce electricity prices.
2. The second (and more important) factor is the rise in network costs. Wholesale electricity prices in Switzerland and Germany were broadly similar in 2025, reflecting Switzerland’s integration into the European grid. What has changed is the cost of using that grid. Data from Switzerland’s electricity regulator suggest that network charges have risen sharply since 2011. A large customer consuming 7.5 million kilowatt-hours annually paid a median of 4.08 Swiss cents per kilowatt-hour for network access in 2011. By 2024, that figure had risen by 63% to 6.64 cents, before easing slightly to 5.46 cents in 2025.

The recent decline is largely due to lower costs for winter hydropower reserves. But there is little reason for complacency. Network costs are likely to continue rising over the medium to long term. New reserve power plants are planned for emergencies, with costs passed on through network charges. Meanwhile, the growing share of solar energy requires grid upgrades and expansion.

Better Price Signals, Not Subsidies

Three policy priorities emerge from these developments:

1. If network costs are to be contained, pricing must better reflect actual usage. Both companies and households should have incentives to shift consumption to times when the grid is under less strain. The same principle should apply to supply, for example, solar power fed into the grid. Such incentives would reduce the need for costly grid expansion. Given the high fixed costs of the network, charges should combine a capacity component, based on a customer’s connected load, and a usage component that varies with grid congestion. Switzerland’s transmission system operator, Swissgrid, has already begun to place greater weight on capacity-based pricing.
2. The experience of the British Isles underscores the value of an integrated electricity market. Limited interconnection with the European mainland contributes to higher costs in Ireland and the United Kingdom. Switzerland is seeking to secure access to the E.U.’s internal electricity market through a bilateral agreement, a step that would help keep wholesale prices in line with those of neighboring countries.
3. Subsidies for large consumers should be avoided. They strain public finances and, more importantly, weaken price signals, delaying necessary adjustments and efficiency gains. It is no coincidence that Swiss industry is more energy-efficient than its counterparts in Germany or France, even within the same sectors. Competitive pressure and market prices remain the strongest drivers of efficient energy use.