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Italian government deals second, retroactive, PV blow

Following the official announcement this week that Italy’s energy regulator, GSE, will not open a register for large-scale photovoltaic plants in the second half of 2012, the government has now said it wants to apply a retroactive measure to Article 65 of Law Decree n. 1/2012 ("Decreto Monti") which, if passed into law, will affect photovoltaic installations on agricultural land.

The new decree now has 60 days to be passed into law.

Gestamp Solar

Originally, the Decreto Monti, which stipulates that photovoltaic plants over one megawatt (MW) in size on agricultural land cannot not apply for a feed-in tariff (FIT), was supposed to have come into play on March 29, 2012. However, in a move that has affected investor confidence, the decree came into effect on January 24, 2012, having been published in Italy’s Official Journal.

The changes mean that the original deadline by which the requirements* laid out in Article 10, paragraph’s 4 and 5, of the Legislative Decree n. 28/2011 ("Decreto Romani"), from March 2011, have to be met, has been moved from March 29, 2012, to January 24, 2012. The decree now has 60 days to pass into law.

The news has dealt both the industry and investors a large and unexpected blow. As GIFI, the Italian Photovoltaic Industry Association, told pv magazine, all have been "badly astonished" by the new, retroactive measure. Germany-based project manager, New Energy Projects, also said that the industry was "up in arms" over the news.

The project developer further commented, "For these plants, the new law immediately destroys the right for remuneration (irrelevant of whether or not they are on List A)." It added that since the decree must be converted into law within 60 days, and this requires the consent of parliament, "changes are still possible".

The news has, naturally, provoked investor uncertainty in Italy. As New Energy Projects went on to say, "Given this uncertainty, there is currently the highest caution when buying project rights or investing in yet to be build plants or those under construction."

German legal firm, Rödl and Partner agrees. In a separate statement released, it said, "The fact that, in the days before the official publication of the Decree Law, official versions were not circulated on the internet … the confusion and doubts about only a superficial handling of these themes by the responsible persons in the ministries and government are increased."

* Under the Decreto Romani requirements, photovoltaic systems on agricultural land must: (i) not exceed one megawatt; (ii) have a minimum distance of two kilometers from privately owned land; and (iii) not occupy more than 10 percent of the available land. Furthermore, according to the latest announcement, the systems now must also be operational no later than January 24, 2013.