More than half of Italy’s installed solar capacity is subject to a new law that requires plant owners to pay the country’s government an increase in profits resulting from high electricity prices, according to a board member of trade body Italia Solare.
As much as 13GW of solar plants that receive feed-in tariffs through the country’s Conto Energia scheme are affected by the measure, Stefano Cavriani, who is also a director of energy trading company EGO Energy, told PV Tech Premium.
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Introduced by Italy’s government last week as part of an urgency decree, the measure applies to PV plants with a capacity of more than 20kW and is set to remain in place until the end of 2022.
Cavriani said that with “very few” market parity solar projects operational in Italy, incentivised installs make up 99% of the country’s solar capacity. And as smaller rooftop installs are excluded from the policy, he said the total amount affected by the profit clawback is 13GW.
Italy’s installed solar fleet is currently just over 22GW, according to SolarPower Europe, which was among a group of trade associations that yesterday released a statement warning that the profit clawback will undermine investor confidence and jeopardise Italy’s clean energy transition.
Projects under the Conto Energia mechanism can generate revenues both from the fixed-rate incentive, granted for up to 20 years, as well as through the sale of electricity into the market or to Italy’s energy management agency GSE.
Where the government wants to claw back the extra profit is not from the incentive, but from the other revenues generated from the sale of electricity, said Riccardo Narducci, a senior associate at law firm Dentons.
These profits will be used to help pay for new measures aimed at limiting the impact of soaring energy prices, including €1.7 billion (US$1.9 million) that the government will make available to support businesses.
On top of the Conto Energia, the profit clawback also applies to merchant PV plants with a capacity of more than 20kW – a policy that Cavriani described as “totally absurd, because it is a very small amount of plants. So it will be a very small amount of money, which eventually they will be able to get”.
Cavriani said this segment will also be complicated to manage, with it unclear how GSE will be able to register every price as a public database of transactions doesn’t exist.
According to Dentons, more clarity on the scope of application, calculation criteria and payment and offsetting mechanisms of the profit clawback should be provided within 30 days from the entrance into force of the decree.
While the decree has already been enacted as it is an emergency measure, it will expire if it is not converted into law by Italy’s parliament within 60 days.
Cavriani believes there will be a push in the next two months to amend the law: “For sure, there will be something which will be changed in the details of the decree. For example, the non-incentivised photovoltaic [projects], personally, I expect that they will be cancelled from the decree.”
Italy’s ministry of economic development did not respond to a request for comment by the time of publication.
