New Conto Energia III reveals multi-stage FiT cuts in Italy

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  Italy irradiation levels

According to the new Conto Energia III, Italy will reduce its funding for solar electricity in three phases starting from 2011. The cuts, which were first provisionally announced back in July, come in line with the current market conditions, which are forcing countries all over Europe to follow suit. However, despite these changes, EuPD Research remains positive that the Conto Energia III still offers a high degree of investment security.

Under the new legislation, feed-in tariffs (FiT) for solar electricity generated by open-space systems with a capacity up to 5MW are to be cut by 9.3% on average during the first four months of 2011, while incentives for solar projects with a capacity of 5MW and more will be decreased by 14.2%.

The cuts for rooftop solar systems are expected to be between 4.75% and 13.28%, depending on the size of the system. All tariffs are then to be decreased every four months during 2011.

EuPD summarizes 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 3kW will be €0.402/kWh, and €0.333/kWh for solar rooftop projects over 5MW. 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 3kW are now to be grouped with the next category which is systems of up to 20kW;
• 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 3GW for non-integrated solar and 200MW 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," said Markus A.W. Hoehner, CEO of EuPD Research in Bonn.

The research company continues to say that by capping capacity at 3GW (+200MW 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. "At the same time, an artificially induced 'overheating' of the solar market has been impeded."