Italy set to announce new solar subsidy bill

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After two months of uncertainty, the Italian Government finally looks set to unveil its much-anticipated new solar feed-in tariff bill. A draft decree of the Conto Energia IV bill is currently in circulation and includes legislation to reduce subsidies and introduce a 23GW cumulative cap until 2020, according to analysts at Germany’s Commerzbank.

Under the terms of the draft decree, the regulatory period has been split into two parts: a transition period from June 2011 until the end of 2012, and then 2013 through to 2016. This 19-month transition will witness subsidy caps placed on ground-mounted installations and on new FiTs at 3.1GW and €820m respectively.

Meanwhile, tariff rates for all installations are set to fall by 3-5% per month until the end of the year 2011, and then be reduced by a further 8-12% in both the first and second half of 2012. No formal capacity caps have yet been introduced for the second regulatory term (2013-16), although tariff reductions are expected to be steeper than the specified quarterly 4% if the specified total FiT cost threshold is exceeded.

Conto Energia IV will come into force on June 1 and its imminent announcement brings to an end months of uncertainty over the future of Italy’s solar industry. Before it can be passed, though, the ministry must discuss the proposed changes with regional bodies, which are likely to insist on certain amendments.

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