3 June 2011


Italian new FiT scheme still subject to many uncertainties, penalizes large plants

“With the 4 Conto Energia, this type of plant will no longer be possible,” Andrea Fontana, CEO of FRV in Italy told Solarplaza. “This is a major limit because all abandoned areas that could have been converted into photovoltaic plants will no longer be developed this way because they will have to go through the registry mechanism that entails delays and make these projects difficult to finance.”

“This was a serious lack of vision by the legislator who was not against building on agricultural land but against large plants, which wherever they are, represent a real alternative to traditional energy sources, something small plants cannot fully be,” Fontana added.

The Italian government announced in March it would change the feed-in tariff mechanism that had been approved just last August. The new scheme applies until 2016 and sets a 23 GW installed capacity target.
 “It is the sign that photovoltaic energy is no longer considered ‘marginal’ but fundamental not just for the 20-20-20 objectives but also as an energy source at the base of the country’s energy procurement,” said Paolo Rocco Viscontini, chairman and CEO of Enerpoint.

While there are no spending caps for roof-top plants and those under 1 MW, large and ground-mounted plants are limited. Large plants completed by August 31, 2011 will directly access incentives, while those operational after August will have to sign up with a registry managed by the GSE who will decide which plants will be entitled to receive which incentive.
“In terms of volumes I expect a boom in connections to the grid by August because everyone will rush to save what can be saved. After that there will be much less activity. What will be left are roof-top plants that have a 1 MW limit, and there are less available roofs than land, therefore with completely different volumes,” said Emanuele Tacchino, head of business development at Solar Ventures.

The registry opened on May 22 and requests have to be submitted by June 30. However, Tacchino noted that for 5 days there were problems with the registry’s information system. Since the date in which the operator signs up determines its ranking in the registry, and therefore its possibility of receiving the incentive, this caused some alarm.
“Which financial institution is ready to provide financing in a climate of complete uncertainty? Almost none. This mechanism rewards those who don’t need to resort to equity, the rest, and that means most, will have great difficulties accessing credit,” he said.

According to Fontana the complexity of the system will reduce new installed capacity, which this year could reach some 8.5-9.0 GW, including some 4.0 GW installed of the so-called Alcoa Decree that extended 2010 incentives to plants completed by end 2010 but connected by end-June 2011. For 2012, he sees installed capacity of 3.5-4.0 GW, with the fourth Conto Energia capping capacity from large plants at 770 MW in the first half and 720 MW in the second.

For Gert Gremes, head of Tecno Spot, the new scheme does not penalize small- and medium-sized plants but the “time for large-sized plants is over.”
Gremes notes that the major problem for his companies was that since the announcement of the change in March until its approval in May, the market was blocked so distributors were left with supplies that will have to be sold at a discount.

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