The Swiss government is considering massive solar subsidy cuts in a move the country’s PV industry has warned could have “profoundly” damaging effects.

The Swiss Federal Office of Energy confirmed to PV Tech that the country’s Federal Council is contemplating cuts of 35-40% and a decrease in power purchase agreement periods from 25 to 15 years.

The national solar industry association, Swissolar, said that subsidy cuts of this magnitude would have a “profound” effect on the industry, decreasing the rate of new solar installations, especially larger projects.

But Swissolar said it was “quite optimistic” that the proposed cuts would be partially withdrawn as it claims the calculations behind the new tariffs are “wrong” and are not in line with Swiss energy laws.

No other incentives or tax breaks have been proposed to replace subsidies, but no more annual subsidy cuts would be made after if the changes go ahead; although the government would still have the ability to make further cuts if necessary, cuts would no longer be annually automatic, Swissolar said.

The deadline for submissions for companies and associations to submit opinions on the proposed changes to the council is 11 September. After looking at feedback, the council will decide if the legislation for solar subsidies needs to be changed.  

If approved, the legislation would be valid from 1 January 2014. Any systems already installed by then would receive the current FiT, but after that the new tariffs would apply.

Swissolar said it was “strongly campaigning against” the proposed changes.