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Italy reduces solar subsidy

Italy is reducing funding for solar electricity in three phases starting from 2011.

Despite the decreases, Conto Energia III still offers a high degree of investment security despite the moderate reductions made in line with current market conditions, according to analyst EuPD Research.

Funds allocated to the feed-in tariffs (FiT) for solar electricity generated by open-space systems with a capacity up to 5 MW are to be cut by 9.3% on average during the first four months of 2011.

Incentives for solar projects with a capacity of 5 MW and more will be decreased by 14.2%.

The adjustments for rooftop solar systems are between 4.75% and 13.28% depending on the size of the system. All tariffs are to fall every four months during the year 2011.

EuPD Research summarises the main points of the new Conto Energia III:

  • In future a distinction is only to be made between two types of solar systems namely ‘rooftop’ and ‘other systems’;
  • The tariffs for small solar rooftop ranging from 1 to 3 kW will be €0.402/kWh, and €0.333/kWh for solar rooftop projects over 5 MW. The aforementioned are valid for the first four months of 2011;
  • Systems not installed on a building are classified under the term ‘other systems’. The smallest of which will be entitled to €0.362/kWh and the largest €0.297/kWh during the first four month of 2011;
  • The revisions applicable for BIPV systems are quite moderate and will be determined once for the whole year. Of greater relevance here is the new classification of sizes. Systems between 1 and 3 kW are now to be grouped with the next category which is systems of up to 20 kW;
  • A further annual degression of 6% is intended for all non-integrated solar projects for the years 2012 and 2013. BIPV systems are to be subject to a degression rate of only 2%; and
  • The magnitude of the market will initially be limited to 3 GW for non-integrated solar and 200 MW for BIPV. Experience has shown this to be sufficient. Similar to the Conto Energia II, a 14 month transition phase has also been granted in which funding will continue even after the maximum market volume has been reached.

“The new Conto Energia III clearly shows that an adjustment with a sense of proportion can also work in growth markets such as the Italian market. The fact that a sweeping cut of all tariffs is no longer under discussion and that the adjustments have been tailored to the individual market segments should be greeted,” says Markus A.W. Hoehner, CEO of EuPD Research in Bonn.

By capping capacity at 3 GW (+ 200 MW BIPV) and guaranteeing tariffs for an initial period of two years, 2012 and 2013, sufficient scope for the controlled further development of the solar market has been provided, EuPD Research says. At the same time, an artificially induced ‘overheating’ of the solar market has been impeded.

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Photovoltaics (PV)  •  Policy, investment and markets  •  Solar electricity