Italy plans solar incentives cuts of 18 percent

"The draft legislation on the new incentives scheme for solar power envisages a cut of 6 percent every four months in 2011," stated Industry Ministry undersecretary Stefano Saglia.

In May, reports Reuters, the operating director of state energy management agency GSE said Italy’s new support scheme for solar energy sector would cut incentives by up to 25 percent in 2011 and by six percent a year in 2012 and 2013.

Draft legislation on the new solar incentives still needs approval by the state body overseeing relations between the central government and the regions.

Mr. Saglia said no further cuts in solar incentives beyond the 18 percent reduction next year were envisaged. He said he would ask for a special meeting of the state body dedicated to energy issues.

Several delays in the plan’s presentation, expected since the start of this year, have raised investor concerns and added volatility to shares in Italian solar firms such as TerniEnergia and ErgyCap.

Reuters added that Italy has a total installed photovoltaic capacity of about 1,160 megawatts. The government is drafting the new incentive scheme for the sector to bring support in line with falling costs of photovoltaic systems.