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Consultations and deliberations are now over as the Italian Council of Ministers signed on a new Conto Energia IV, effective on June 1, 2011. Since a review was announced the Italian market has effectively been frozen, especially for commercial and utility-scale projects, causing the PV supply chain to balloon with module inventory some market researchers have put at between 2 - 3GW. The situation was exacerbated by the slow start in PV installations in Germany this year.
In a recent presentation by GIFI (Gruppo Imprese Fotovoltaiche Italiane) trade association Board member, Averaldo Farri at the Photon Conference in Berlin, delays in creating a new FiT had put 10,000 jobs at risk with €8 billion of orders blocked and a claimed €20 billion of PV contracts on hold.
Key changes incorporated into the Conto Energia IV include a monthly degression of the tariff system and a funding cap for large systems. Interestingly, the new Conto Energia provides a 5% tariff bonus to system operators should 60% of the investment cost (modules and inverters), rather than installations costs be sourced from companies making such products actually in the EU. Importantly, existing permitted projects under previous tariff would be allowed to continue through August 31, overlapping with the new FiT.
Fears had been circulating that a total cap on installations would be imposed but the funding cap enables continued expansion and support for PV in Italy. According to the new rules there has been a cap (€580 million) imposed for large systems through 2012, which according to EuPD Research would enable an installed capacity of 2.69GW, based on current prices.
Further funding from 2013 to 2016 has been limited to €1,361 billion, which according to EuPD Research would allow for 9.77GW of installed capacity under current pricing conditions.
A half-year degression of tariffs will take place from 2012, but in 2013 an increase of between 5 and 10 cents is planned.
However, all other forms of funding such as tax breaks and investment subsidies are to be abolished. Funding is then to be adjusted on a half year basis as of the second half of 2013. Degression will rise to the same extent as installed capacity rose in the period previously under review.
Back in 2007 the Italian Ministry for Industry passed a law for a new FiT for PV installations that guarantees a feed-in tariff for installations larger than 1kW. This gives the owner the current PV rate that can be seen in the table above.
According to the new Conto Energia III, Italy will begin reducing its funding for solar electricity in three phases starting from 2011. The cuts come in line with the current market conditions, which are forcing countries all over Europe to follow suit.
Under the new legislation, feed-in tariffs 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 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.
Looking ahead, Italy has put in place mandatory targets to reach in terms of renewable energy sources; the main target set is a 17% share of RES on the final consumption of energy in 2020. In terms of electricity the target set is for a 25% share of RES on gross electricity consumption by 2010.
