Italy Reasses Solar Rates

By Marc Roca
July 12 (Bloomberg New Energy Finance) -- The Italian government introduced legislation that would cut feed-in tariffs paid for power from solar photovoltaic plants beginning in 2011.
The proposal, which must be approved by parliament, maintained the terms in a draft bill circulated June 1 calling for the tariff to decline by 6 percent every four months next year and another 6 percent in the two years thereafter, the Ministry of Economic Development said in a statement.
The decision leaves the rates Italian utilities pay for solar power among the most attractive in Europe and may trigger a rush by developers to build solar plants in Italy just as in Spain and Germany in recent years, said Francesco D’Avack, a solar analyst at Bloomberg New Energy Finance in London.
“The Italian market risks entering a dangerous boom and bust cycle,” D’Avack said. “All this could lead to unsustainably fast growth and a belated reaction by the government to keep costs in check. There are a couple of fat years ahead for developers.”
The new law would also establish a 3-gigawatt cap in solar capacity by the end of 2013 in addition to 200 megawatts for PV projects integrated into buildings and 150 megawatts in concentrated PV projects, which use mirrors to focus the sun’s rays on solar panels.
The ministry reached an agreement on the final shape of the law at a conference last week including representatives from the state, regions and local authorities following several postponements of the meeting since the beginning of this year.
Permission Process
“The main obstacle to even faster growth, namely a byzantine and regional permitting process, has been removed through simplified, national planning guidelines,” D’Avack said.
Officials at the ministry were not available to comment.
The new solar energy bill, or Conto Energia, will come into effect on Jan. 1 and substitute the 2007 version, which led to about 1.13 gigawatts in PV capacity being installed by the end of 2009, according to figures from grid regulator GSE. The government aims for solar capacity to reach 8 gigawatts by 2020.
“The Conto Energia and the new guidelines for renewable projects, long-awaited by sector’s players, provide a decisive push to the government’s renewable energy strategy,” Stefano Saglia, under-secretary for energy at the ministry, said in a statement. “These measures boost innovation in a key sector for growth and competitiveness of the country and allow the harmonization and simplification of national and regional procedures.”
Along with regions and local authorities, the ministry also approved new administrative guidelines for projects in all renewable energy sectors based on a single model for all the country. The new guidelines will be sent within 90 days of the text’s publication to regional and local authorities, which are the entities that approve projects in the country.
--Editors: Reed Landberg
To contact the reporter for this story: Marc Roca in London at mroca6@bloomberg.net
To contact the editor responsible for this story: Angus McCrone at amccrone1@bloomberg.net