Italian Government considers solar subsidy cap

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The Italian Government is considering introducing an installed capacity cap for solar subsidies as part of its new renewable energy legislation, reports Reuters. If confirmed, this latest twist in the subsidy saga will be a major blow to the industry and comes just six weeks after reports circulated that the government had dismissed plans to introduce an industry-wide 8GW cap.

“We have spoken to the [Industry] ministry and the feeling is it might introduce a cap on installed capacity, though the decree has not been finalised,” a source at one of Italy's energy associations said.

The mixed messages about the government’s stance towards solar sent out by such reports are likely to create further uncertainty among investors and undermine Italy’s rapidly-expanding PV industry. Reuters also revealed that, despite reports to contrary, the much-anticipated bill, which will come into force on June 1, is unlikely to be signed off until at least next week.

Before being passed, the decree needs to not only be ratified by the Industry and Environment ministries but also be given the green light by a committee of representatives from regional governments and industry bodies; the committee is due to meet on April 20.

Further clues to the outcome of the decree emerged on Sunday, when Italian newspaper La Repubblica reported that the latest version of the draft decree would include a cap on installed capacity of 1.55-1.8GW for 2011 and up to 2.8GW in 2012. The article also claimed that solar power generation in 2011 would be cut by 25% immediately with a further 8% cut in 2012.

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