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An enormous amount of growth in PV installations for Italy is being predicted by market research firm iSuppli Corp. According to the analysts’ senior director and principal analyst for PV systems, Dr. Henning Wicht, detailed checks show that 975MW will be installed in the country in the fourth quarter. This will result in total installations for 2010 reaching nearly 2GW. Further impressive growth is expected in 2011, when installations reach nearly 4GW.
“The strong fourth-quarter growth represents a breakthrough for Italian PV installations, which until now had been limited to 300MW or less, with the expansion propelled by installers rushing to take advantage of an Italian government subsidy scheduled to expire soon,” noted Wicht.
Wicht told PV-Tech that projects built before the end of the year need not be connected to grid at that time to receive tariff payments but have till mid-year 2011 to be connected to benefit from the soon to expire tariff rates.
Under the current Italian FiT, a highly attractive internal rate of return (IRR) of 15 to 18% is possible.
Based on interviews with leading project developers and energy performance contractors in Italy, iSuppli predicts the country will install 975MW in the fourth quarter, doubling the 487MW in the third quarter, and rising 239% from 288MW during the fourth quarter of 2009.
According to Dr. Wicht the fourth-quarter surge will cause installations in 2010 to rise to 1.9GW, up 100% from the previous record of 720GW in 2009.
The market analyst said that the Italian market is now capable of significant monthly installation rates as more installers and project developers have and continue to move into that market.
Growth in installations will set the stage for another doubling of the market in 2011, with installations rising to 3.9GW.
“It is true, Italian solar installations will drop at the start of the first quarter of 2011, following the burst of the growth at the end of 2010. But the decline is set to last only weeks, rather than months, with the rate of new installations to rise rapidly again following this period” added Wicht. “And despite the expected FiT declines, the IRR of solar investments in Italy still will be higher than anywhere else. As a result, installations in Italy will rise to approximately 1GW per quarter in 2011.
However, Wicht also raised some cautionary points regarding the Italian market. He sees the potential risk in the Italian government reducing the FiT more quickly than scheduled. This is unlikely to happen quickly however, due to the unstable political situation of the Silvio Berlusconi government.
Apparently, official data from GSE could be delayed by as much as six months, resulting in the deferral of any formal assessment that would lead to FiT adjustments.
Another concern is that regional governments may try to limit the amount of land used for ground mounted PV systems, even though limits potentially aimed for must pass Italian federal law.
Finally, Wicht noted that grid connection in Southern Italy could prove more challenging than elsewhere, posing additional installation headaches - though he doesn’t see these as show stopping problems.
The impressive growth expected in Italy this year and next correlates to iSuppli’s overall strong growth for the PV industry in 2010 and 2011. Recently, iSuppli projected installations worldwide would reach approximately 15.8GW in 2010 and grow to 19.3GW in 2011.
Worldwide installations in 2010 will amount to 15.8GW, up from iSuppli’s previous outlook of 14.2GW. This will represent 118.7% growth from 7.2GW in 2009. iSuppli now forecasts that installations in 2011 will amount to 19.3GW, down slightly from its previous forecast of 20.2GW.
