Italy to implement further FIT cuts

It has been said that tariffs for solar electricity generated by open-space systems with a capacity up to five megawatts (MW) are to be cut by 9.3 percent, on average, during the first four months of next year; incentives for systems with a capacity of five MW and more will be decreased by 14.2 percent. The adjustments for rooftop systems are said to be between 4.75 percent and 13.28 percent depending on the size of the system.

Nevertheless, EuPD said that the Conto Energia III still offers a "high degree" of investment security, despite the "moderate reductions" made in line with current market conditions.

It was not until the official entry in the Italian Gazzetta Officiale that the third revised amendment of the Italian law on the funding of solar energy, the Conto Energia, came into effect, continued EuPD. In May of this year, the Italian government "paved the way" for the introduction of simpler permit processes nationwide; a step which it was said facilitated the enactment of the amendment. It added that although initial plans saw funding being curbed across the board by 30 percent, cutbacks are now to be more differentiated than expected.

The most important points of the new Conto Energia III, according to EuPD, allow for the following amendments to the remuneration of solar electricity:

  • In the future a distinction is only to be made between two types of systems namely ‘rooftop’ and ‘other systems’.
  • The tariffs for small rooftop systems ranging from one to three kW will reportedly be 0.402 Ä/kWh, and 0.333Ä/kWh for rooftop systems over 5,000 kW. The aforementioned are valid for the first four months of next year.
  • Systems not installed on a building are classified under the term ‘other systems’. The smallest of which will be entitled to 0,362 Ä/kWh and the largest 0,297 Ä/kWh during the first four months of next year.
  • The revisions applicable for BIPV systems are "quite moderate" and will be determined once for the whole year. Of greater relevance here, said EuPD, is the new classification of system sizes. It added that systems between one and three kW are now to be grouped with the next category, which is systems of up to 20 kW.
  • A further annual degression of six percent is reportedly intended for all non-integrated systems for the years 2012 and 2013. BIPV systems are to be subject to a degression rate of only two percent.
  • The magnitude of the market will initially be limited to 3,000 MW for non-integrated systems and 200 MW for BIPV systems, continued EuPD. "Experience has shown this to be sufficient," it stated. Similar to the Conto Energia II, a 14 month transition phase has also been granted in which funding will continue even after the maximum market volume has been reached.

"The new Conto Energia III clearly shows that an adjustment with a sense of proportion can also work in growth markets such as the Italian market. The fact that a sweeping cut of all tariffs is no longer under discussion and that the adjustments have been tailored to the individual market segments should be greeted," commented Markus A.W. Hoehner, CEO of the market research company and consultancy, EuPD Research in Bonn, Germany.

According to the analysts from EuPD, the Italian government has, with the passing of the Conto Energia III, now acted on their responsibility to sustainably develop the solar market. It said that by capping capacity at 3,000 MW (+ 200 MW BIPV) and guaranteeing tariffs for an initial period of two years, 2012 and 2013, sufficient scope for the controlled further development of the market has been provided. At the same time, it said an artificially induced ‘overheating’ of the market has been impeded.