For many markets, especially mature ones, co-locating storage with solar has become a necessity, as is the case in Chile, where it has otherwise become financially infeasible to build standalone solar.
In Italy, it is the opposite, according to Patrizio Donati, co-founder and managing director at independent power producer, Terrawatt, who told PV Tech that he isn’t interested in co-locating storage with solar PV, at the moment.
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“The point of having co-located storage is to protect yourself against negative pricing.”
This is a problem that the Italian market is not currently facing. In fact, power prices in Italy have been stable and high in the past few years. Donati mentions that prices in Italy “fluctuate very little, right now,” as seen in the chart below. Donati explained that the barely varying price is due to the fact that most of Italy’s energy still comes from gas.
Average monthly power prices in Italy have been high since 2024 compared to other big European markets. Average prices never dipped below €80/MWh (US$93.5/MWh) in a given month, according to data from think tank Ember. But even looking at prices in 2023, these were also above a monthly average of €100/MWh.
“I don’t really see the risk in the immediate term for negative prices to really start to affect the Italian market, especially because now most likely, almost all solar farms and almost all renewable projects will be under the FER X decree for basically the coming 20 years,” Donati said.
The FER X decree, which came into force in February 2025, aims to introduce a 20-year contract for difference (CfD) for renewables. The first tender under the policy earlier this year received 17.5GW of solar PV applications, twice as much as the maximum available capacity set by the Italian government, showing the huge interest from solar PV to participate in the tender.
“I’m not saying that you don’t need to have storage. I’m saying that right now it doesn’t make sense to invest [in co-located storage],” added Donati.
Premium subscribers can access a more in-depth interview with Donati on the Italian market, which covers the latest legislation hurdles, how the FER X CfD offers clear support for solar developers and the complexities of developing agrivoltaics in Italy.
Patrizio Donati will be speaking at Large Scale Solar Southern Europe on 16-17 September 2025, in Athens, Greece. The event will cover key topics such as grid, co-locating energy storage or investment in Greece, Italy and the Balkans. Full details on the event are available here.
