PV in Italy: Sunny Future But Slow and Chaotic Start

The national government launched a feed-in tariff for solar energy systems in July 2005 with a 20 year payment guarantee. The attractive financial incentives (national and regional), the good climatic conditions and the availability of free land create excellent conditions for rapid growth.

The current market situation (Q3 2006) is slightly chaotic due to the enormous over subscription of the feed-in tariff incentives during the early part of 2006 and the yearly limit. The government, advised by the solar industry association GIFI, is currently assessing this system.

The total installed power of PV systems in Italy by the end of 2005 was 36 megawatt-peak (MWp). Current estimates for 2006 are 30-53 MWp. The government target is to have 1000 MWp installed by 2015. The total budget of the government for the feed-in-tariff is 500 MWp, 360 of which is available for PV systems with a capacity <50 kilowatt-peak (kWp) and 140 MWp for PV systems with a capacity >50 kWp.

On top of the feed-in-tariff, PV system owners of smaller solar systems can sell their electricity to the local utility company. This combination offers a financially attractive incentive that is even higher than in Spain.

In February 2006 the Italian government introduced a yearly limit of 85MWp. The number of submitted applications for the feed-in tariff is dramatically higher than available due to this limit. In the first quarter of 2006, the GRTN (the Italian body in charge of granting approval to applications) received almost 17,000 applications for a total capacity of more than 1,300 MWp. Currently this limit is under discussion, since the procedures were complicating the realization process too much.

The amount in 2007 will strongly depend on possible changes in the feed-in tariff system and the administrative and (local) permit application procedures as well as a further development of distribution channels.

The survey concludes that the Italian market offers a large potential and is attractive for companies to move into the PV business and/or to expand existing PV business activities. Already several foreign companies (like Phoenix Sonnenstrom, SolarWorld, Suntechnics) took over shares in existing companies or started new branches.

Italy could follow Spain in the development of many large solar farm projects. In this early stage of market development, a clear trend in this direction is not yet visible. But the ingredients are there: sufficient cheap land available at low cost in sunny regions.

On the other hand, the challenges are similar to the ones in Spain: administrative and bureaucratic permit procedures. The Italian market will need time to educate all its stakeholders, including local municipalities and the energy utilities.

The SolarPlaza market survey provides details about the current market situation, the incentive system, a market analysis and forecast, company profiles of the 30 major Italian PV companies and a further list with more than 100 Italian companies active with solar PV.

Edwin Koot is the Director of SolarPlaza BV. This article was reprinted with permission from SolarPlaza.com