Electricity: the announced reduction does not eliminate the price risk for SMEs

Electricity prices are giving Swiss businesses some breathing space, but not yet any real peace of mind. Following the surge in recent years on European energy markets, Swiss regulated tariffs are expected to fall in 2026. According to ElCom, the median electricity price for households on the basic supply tariff stands at 27.7 centimes per kWh, which is around 4 per cent lower than in 2025. For a typical household consuming 4,500 kWh per year, the reduction amounts to 58 francs on the annual bill.

For SMEs, this is a positive sign, but it should be interpreted with caution. Electricity remains a significant cost item, particularly for shops, workshops, restaurants, doctors’ surgeries, small industrial businesses or firms using refrigeration, ventilation, machinery or servers. And in Europe, prices remain subject to an increasingly decisive factor: the weather. Droughts, heatwaves, cold spells or a lack of wind can impact generation, the grid and demand. In other words, even when tariffs fall, the energy risk does not disappear from the budget.

Some relief in 2026, but not a return to carefree times

The drop announced in Switzerland is largely due to falling energy prices on the markets, according to information reported by swissinfo.ch based on data from ElCom. For consumers on the basic supply tariff, however, the final tariff does not depend solely on the wholesale price. It comprises several components: the energy itself, grid usage, taxes and levies, as well as metering costs. It is this total that appears on the company’s bill.

Understanding how this works is important for an SME manager. A fall in energy market prices can be partly absorbed, offset or amplified by other components. Grid costs, for example, reflect the maintenance and operation of infrastructure. Taxes and levies also depend on the federal and local regulatory framework. The research report specifically mentions a federal network surcharge of 2.3 ct./kWh in 2026 and local charges generally around 1 ct./kWh. For a business with regular consumption, every centime per kWh ultimately adds to its operating costs.

The challenge for an SME is therefore not simply to know whether electricity prices are falling or rising on average. It is essential to understand which part of the bill is changing, when this happens, and what impact this has on profit margins. A bakery, a garage, a joinery workshop or an IT services company do not have the same consumption profile. The power demand, operating hours, the equipment used and the scope for shifting certain usage patterns can significantly alter the actual impact of a tariff.

The climate is introducing volatility back into a bill that was thought to be predictable

Electricity has long been seen as a relatively stable cost: consumption was budgeted for, the local tariff was applied, and then adjustments were made slightly from one year to the next. This approach is no longer sufficient. The European electricity system is interconnected, and weather conditions are increasingly influencing the balance between generation and demand.

When temperatures rise, demand for cooling can increase, whilst certain forms of generation become more susceptible to environmental or technical constraints. During periods of drought, hydroelectric power can come under pressure. When there is a lack of wind, wind power generation falls. In winter, consumption peaks linked to heating and economic activity can strain the system. These factors do not alone determine the price paid by a Swiss SME, but they do influence market prices and suppliers’ expectations.

It is precisely this link between the weather, generation availability and market prices that explains why the easing of pressure forecast for 2026 should not be interpreted as a long-term guarantee. For businesses, the sensible approach is to treat electricity as an operational risk to be managed, in the same way as rent, wages, interest rates or the purchase of raw materials. A bill that varies by a few per cent may seem modest; in a low-margin business, however, it can affect the bottom line, especially if it comes on top of other cost increases.

In Switzerland, the local authority can sometimes be just as important as the market

The situation in Switzerland has a further distinctive feature: not all consumers are affected in the same way. The electricity market is partially liberalised. Consumers whose annual consumption is less than 100,000 kWh fall under the basic supply scheme and cannot freely choose their supplier. The research report specifies that this applies to the majority of SMEs. The tariffs applicable to these customers are regulated by ElCom.

This structure provides some protection for small consumers against immediate market fluctuations, but it also introduces a strong local dimension. Tariffs vary depending on the municipality, the network operator and the supply structure. For 2026, the report indicates a range from 22 centimes per kWh in cantons with high hydroelectric production, such as Valais and Ticino, up to 42 centimes in certain German-speaking municipalities. For two businesses with comparable operations, their location can therefore result in a significant difference in their bills.

Suppliers generally publish their tariffs for the following year at the end of August. This timetable is useful for budget planning: it allows forecasts to be revised before budgets are finalised and helps anticipate cost prices. In an SME, this information should not simply be filed away in an invoice folder. It is also relevant to management, the accounts department, production managers and, in some cases, human resources – particularly where working hours, the use of premises or remote working affect energy consumption.

Business customers: there are price reductions, but they are not all the same

Announcements from suppliers show that the reduction is not uniform. Groupe E is forecasting an average reduction of 1.6 per cent in its tariffs, according to the information cited in the report. Viteos, for its part, has announced a reduction of 9.8 per cent for households and 6.9 per cent for high-consumption business customers from 1 January 2026. These figures illustrate a very real situation: the national median tariff indicates a trend, but the actual bill is calculated locally and according to the customer’s profile.

For businesses exceeding the threshold for access to the open market, the situation may differ further. They may be more exposed to electricity procurement strategies, at the time of signing contracts and in terms of the level of cover chosen. For the smallest SMEs, the challenge is different: they do not usually choose their supplier, but they can influence consumption, the power drawn, internal processes and the quality of monitoring.

In all cases, the first step is often very simple: reading the bill in detail. Many businesses look only at the total amount, without distinguishing between energy, network charges, levies and taxes. Yet doing so reveals where action can be taken. Commercial negotiations will not alter a public levy. An investment in energy efficiency will not necessarily reduce every item on the bill to the same extent. And a fall in the price of energy may be less noticeable if consumption rises at the same time.

Treating electricity costs as a management risk, not an inevitability

Faced with persistently high prices in Europe and recurring climate-related risks, SMEs would be well advised to adopt a more professional approach, without waiting for another crisis. This does not necessarily mean launching a major energy programme. A step-by-step approach is often enough to manage this cost item more effectively: recording monthly consumption, identifying peaks, comparing sites, checking equipment operating hours, updating maintenance contracts and factoring announced tariffs into budgets.

Businesses whose operations rely heavily on electricity should also test several scenarios. What happens if the local tariff does not fall as much as expected? What if a charge changes? What if business increases and leads to higher consumption? What if ageing equipment consumes more? These questions are not mere speculation: they help to safeguard profit margins and set more realistic selling prices.

Energy efficiency measures must be examined with the same rigour as any investment. Replacing equipment, improving cooling control, optimising lighting, adjusting ventilation or monitoring consumption more closely can reduce dependence on prices. However, the calculation must take into account the company’s specific circumstances, the equipment’s useful life, production constraints, financing and any available subsidies. An accountancy firm can help translate a technical project into financial terms: annual costs, depreciation, cash flow, and the impact on cost price and profit.

The drop forecast for Switzerland in 2026 is therefore good news, but it does not settle the matter. The electricity sector is entering a period where bills will depend on markets, networks, local decisions and a less predictable climate. For SMEs, the challenge is not to predict the next shock, but to avoid being caught off guard: understanding their bills, keeping track of tariff announcements, recording their consumption and factoring energy into day-to-day management decisions. In a European environment that remains fragile, this discipline can be just as valuable as a tariff reduction.