The End of an Era in Italy

Italy is about to reach the end of its PV funding scheme Conto Energia, which so far resulted in a photovoltaic capacity of 17 GW. The current program, Conto Energia V (CE V), is scheduled to phase out as soon as the total annual funding costs reach €6.7 billion. This program is set to be the last Conto Energia in Italy.

On 28 May 2013, the annual costs reached €6.697 billion. This number takes into account the two registers of CE V, including projects that have yet to be built. The registers are administered by the Italian state agency for renewable energies Gestore Servici Energetici (GSE) and are obligatory for most types of PV systems above 12 kW that seek to benefit from CE V.

Only €3 million of annual funding is left for new projects before the funding cap will be reached. After the announcement of the end of CE V, all systems that are exempted from the obligation to register will be entitled to funding if they are completed and have requested funding within 30 days. Projects in the register will be entitled to funding if they are completed within 12 months after publication in the register.

Registers not exhausted

The results of the second (and most likely last) register under CE V were published by GSE on 23 May 2013. Like in the first register, the budget was not exhausted. Of possible additional €70 million of annual funding costs, only €58 million were allocated, being made up by 3,690 systems totaling 727 MW. Of these systems, 491 were listed as already operational. The two registers of CE V together comprise 1.7 GW of projects, of which approximately 0.5 GW have started operation before the end of the respective registration phase. Many of the completed projects originate from 2010, some even from 2009.

As of 30 April 2013, GSE listed a preliminary number of 450 MW of PV systems that had become operational this year, a number that is certain to go up though in the next months. Solarexpo, Italy’s largest solar energy trade show hosted about two thirds less PV-exhibitors this month than it did last year.

As Conto Energia will not be continued, FIT funding for new PV projects in Italy will phase out in 2013.  In terms of demand though, the end-market has been already curbed due to concerns about funding conditions and analysis provided in the latest NPD Solarbuzz European PV Markets Quarterly report 2013 projects demand levels that are set to be less than half those seen in 2012.

Industry awaits PPA regulation

After Conto Energia, Italy’s PV market will be based on promotional schemes like Scambio sul Posto (net-metering) in combination with tax rebates and increasingly on power purchase agreements (PPAs). Regarding the latter, the hopes of the domestic PV industry lie on a pending deliberation by Autorità per l’Energia Elettrica e il Gas (AEEG). Among other things, the deliberation is meant to regulate Efficient User Systems (Sistemi efficienti di utenza (SEU)), where producers of electricity from renewable sources are directly connected with the end customer. The latest draft (DCO 209/2013/R/EEL) is under public consultation until 14 June 2013, and the final deliberation is expected to become effective in September 2013 at the earliest. The sooner the regulatory framework for PPAs is finalized, the higher the chance for a recovery of the Italian PV market although demand volumes are not anticipated to surpass 2012 levels over the forecast period.