PV industry: Italy’s capacity market needs deeper reform

Facebook
Twitter
LinkedIn
Reddit
Email
Italy is working to build its PV industry from around 20GW today up to 50GW by 2030 (Credit: Flickr / bezaleel31)

PV representatives have joined campaigners in a push for Italy to reform its capacity market, with claims that new emission standards will fail to green up the scheme.

Rome risks “encouraging a race” to build new fossil fuel power plants if it does not overhaul its capacity mechanism, association Italia Solare said this week alongside NGOs Greenpeace, WWF, Legambiente and consumer associations.

This article requires Premium SubscriptionBasic (FREE) Subscription

Try Premium for just $1

  • Full premium access for the first month at only $1
  • Converts to an annual rate after 30 days unless cancelled
  • Cancel anytime during the trial period

Premium Benefits

  • Expert industry analysis and interviews
  • Digital access to PV Tech Power journal
  • Exclusive event discounts

Or get the full Premium subscription right away

Or continue reading this article for free

Their joint statement took note of the European Commission’s go-ahead, late last week, to new CO2 emission requirements set by Italy for technologies competing at capacity auctions.

The new rules will bar new projects with CO2 emissions of 550g/KWh from capacity payments. Starting in July 2025, those emitting on average more than 350kg of CO2 a year per installed kWe will be similarly restricted.

According to the European Commission, the CO2 limits will effectively ban coal plants from Italy’s capacity auctions. The exclusion will open a gap the country can fill with technologies such as demand response and energy storage, the EU executive noted.

‘Goes in the opposite direction’

However, to Italia Solare and the other signatories, the CO2 clampdown will fall short.

As currently designed, Italy’s capacity mechanism will see bill payers fund thermal power plants with an annual billion euros for 15 years, the organisations claimed. The scheme breaches the principle in EU legislation that capacity markets should be rolled out only as a last resort, they argued.

“The Clean Energy Package aims at an increasingly decentralised system of energy communities, active consumers and local generation … while [Italy] is instead working to accelerate the introduction of a tool that goes in the opposite direction,” the signatories said.

The controversy comes to cast fresh spotlight on Italy’s renewable policies, with landmark announcements in the past few weeks.

In a separate development earlier in June, the country secured the Commission’s all-clear to a new renewable subsidy scheme. Auctions and others will award up to €5.4 billion (US$6.05 billion) in contract-for-difference funding to PV, onshore wind, hydro and other renewables until 2021.

For PV, the prospect of government support marks a brighter turn of events after Italy phased down feed-in tariffs in the early 2010s, bringing the 18GW-19GW industry to a standstill. Utility-scale projects are once again making headway, despite lingering regulatory challenges.

See here for more context on EU capacity markets, here for the Commission's decision and here for Italia Solare's statement

3 November 2026
Málaga, Spain
Understanding technology and supplier selection for Europe’s utility-scale PV market in 2027. PV ModuleTech Europe 2026 is a two-day conference that tackles these challenges directly, with an agenda that addresses all aspects of PV module, inverter and battery supplier selection; product availability, technology offerings, supply chain traceability, quality assurance, factory auditing, system reliability, and supplier bankability.
2 February 2027
London, UK
Returning in 2027 for its 14th edition, Solar & Storage Finance Europe will bring together the brightest minds representing funds, banks, developers, utilities, government and industry across Europe and the UK on a programme that is solutions-focused from top to tail. The event is designed to enable leaders at the forefront of solar and storage investment and deployment in Europe to scale, learn and land themselves industry defining partnerships.

Read Next

September 30, 2026
The Solar Markt Group has started commercial operations at the Hódmezővásárhely facility, the largest hybrid power plant in Hungary.
September 29, 2026
The German government has awarded contracts to 480MW worth of solar-plus-storage capacity in its latest public "innovation" tender.
September 28, 2026
Elgin has acquired the Blackhall Solar Farm in County Meath, in the Republic of Ireland, from German energy supplier GP Joule.
September 28, 2026
PV Tech Research writes about the PV inverter technological shift between string and central inverters across the markets.
September 28, 2026
UK renewables developer Low Carbon has unveiled plans for a 500MW solar PV project in the county of Oxfordshire.
September 25, 2026
The replacement of decommissioned solar projects will account for 23% of new capacity additions by the 2040s, according to Wood Mackenzie.

Upcoming Events

Solar Media Events
October 13, 2026
San Francisco Bay Area, USA
Solar Media Events
November 3, 2026
Málaga, Spain
Solar Media Events
November 24, 2026
Warsaw, Poland
Solar Media Events
February 2, 2027
London, UK