Italy: PV cap debate heats up

On Monday, it was announced that the government was considering placing an eight gigawatt (GW) cap on Italy’s PV market. There were fears that if the law was passed, it would mean an end to solar subsidies as early as this summer.

Divided opinions

According to a press release issued by the Italian Government, a congressional debate was held yesterday to discuss the latest draft of the 2020 Renewable Energy Decree. At the debate, Stefania Prestigiacomo from Italy’s Ministry of Environment was quoted as saying: "There is no cap for photovoltaics." It is thought though, that a reduction in the current incentive scheme can be expected.

However, in an interview with Italian Reuters, Italy’s Development Minister Paul Romani is in favor of introducing the cap.

GIFI

On Monday, members of Italian PV Association GIFI, which has been campaigning against the move, met with two representatives of the Ministry of Environment to discuss the decree. The association’s proposals outline the desire to abolish the idea of the eight GW cap, and instead introduce steeper feed-in tariff (FIT) cuts. They also call for a 14 month grace period when eight GW is reached.

The members described the meeting as "positive and collaborative". Valerio Natalizia, President of GIFI stated: "I am glad that the our proposal received a positive feedback from the representatives of the Ministry for the Economical Development. As GIFI we are fully open to negotiate any solution that will allow the Italian PV Industry to keep growing."

Confusing

Speaking to pv magazine, Stefan de Haan, photovoltaics senior analyst at IHS iSuppli, said that the situation is "very confusing". He stated: "The eight GW number has always been the ("soft") cumulative 2020 target in the EU 2020 framework. This is obviously obsolete now. I have no information about an official decision, but everybody is speculating about a new hard cap."

He goes on to talk about the 3rd Conto d’Energia, which has a total budget of three GW of PV installations. It came into effect this January, and is now being reviewed before it has really started. It was planned that after three GW had been reached, a 14 month grace period would come into play. This would have meant that any projects installed and connected within these 14 months would have received the FITs from the 3rd Conto d’Energia.

De Hann continued: "When implementing the scheme, the government probably expected that it would take a few years to fully exploit three GW. Seeing how the market took off in 2010, it’s likely that this will already be the case in mid-2011. Then the 14 month grace period would start and markets would completely overheat."

In relation to how much PV was installed in Italy last year, he says: "We estimate that real 2010 installations reached 2.9 GW. Final data will no be available before June though. This translates into 4.1 GW cumulative installed PV capacity. A hard cap of eight GW cumulative appears reasonable from the government’s current point of view, as it would avoid uncontrollable costs. But it’s a bad idea for the market. Three GW would come from the Conto d’Energia, another 0.9 GW from the grace period, which will then effectively last for only a month or so, then the eight GW target would be hit.

"In this case, we would see between four and five GW of installations between the first and third quarters of 2011, and a sharply declining market thereafter. So, I hope the Italian government will go for a more sustainable solution, similar to Germany."