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Photovoltaic energy in Italy before and after Covid-19

15 October 2020

During the last years, Italy has been one of the leading countries in Europe to develop and implement PV projects due to a very clear government energy strategy and itspolicies to support reaching a total installed capacity of 20GW in 2020.

Currently, the market is expected to grow very fast and PV technology is likely to drive the market in the coming years with a very challenging target of 52 GWp of PV installed by 2030, corresponding to an increase of about 30 GW in ten years.

Short history of the evolution of Photovoltaics in Italy

From 2005 until 2013, Italian PV capacity increased considerably reaching 18GWp installed capacity due to the Conto Energia regime which operates through a Feed-in-Tariff scheme for 20years.

Grupo T-Solar developed under this Conto Energia scenario 7 plants located in Puglia with a total installed capacity of 7,2MW.

In 2013, the government ended the subsidies for new solar projects, and in 2014 legislation was passed to apply rate reduction, but counter balanced by a prolongation of the incentive periods, to existing solar PV projects effective since theJanuary 1st, 2015 (so-called Spalmaincentivi Decree).

From 2017 until 2020, PV capacity has not experienced great growth, compared with previous years, less than 1GW reaching the following total installed capacity by 2020:

New PV scenario:

On November 10th, 2017, the Italian government approved Italy’s new National Energy Strategy SEN 2017 which assigns a key role to photovoltaics, which by 2030 will become the main Italian renewable energy source, targeting 72TWh of solar generation until 2030, which will require building at least 30GW of new large, medium and small solar plants.

As part of this new National Energy Strategy7 new tender procedures have been launched over a three-year period, under Ministerial Decree dated on 4 July 2019 (FER1 Decree 2019), with the following characteristics:

Cover most of the renewable energy sources including PV
Ground-mounted PV plants in agricultural areas are not eligible for the incentives (except for those developed on quarries, landfills, or reclaimed sites – new Simplification Decree released in September 2020).


The incentive is granted for the working life of the plant depending on the type of source (for PV > 1MW is 20 years from CoD and a base tariff of 70€/MWh)

Groups:

Group A: wind plants and PV plants.
Group A-2: only for plants with power capacity lower than 1 MW.
Group B: hydroelectric plants and sewage treatment gas plant.
Group C: wind plants and B-Group plants in ongoing renewal (i.e. plants subject to entire or partial refurbishment).

Round 1, Round 2& Round 3 have been on hold. On 28 January 2020, GSE (Gestore Servizi Energetici) published the ranking regarding the first procedure launched on September 30th, 2019, with atariff awarded for Group A between 48 and 66€/MWh in Round 1, between56 to 68 €/MWh in Round 2 and between 65 to 68 €/MWh in Round 3. The awarded PV projectsin each round were 5 MWp, 19, 3MWp, and 95 MWp respectively.

Although the government target is very high, which has awakened the appetite of several investors, there are some disadvantages which must be solved to reach the ambitious government plan, at leastfor PV technology. As mentioned above, PV projects awarded capacity was extremely low (but constantly growing) in comparison with the windprojects and both participated in the same category.

As a rule, the use of agricultural land for renewable energy is very sensitive. They encourage the promotion of the concentration of the PV plants mainly in areas already urbanized, inlarge industrial areas, specialized nodes, depleted landfills, depleted quarries and mines, contaminated sites, rooftops, major roads, and some areas of public property instead of agricultural areas. These areas are very limited and represent a high development cost and there is also no doubt that these areas willnot be enough to achieve the European objectives subscribed by 2030. In fact, it is widely held among operators in the sector, and of course by Grupo T-Solar also, that the development of PV utility-scale power plants in agricultural areas is necessary for this purpose.

Additionally, the government authorized regions to regulate the development of Renewable Energyconsidering the principles established in National Energy Strategy 2017, that means a balance between Renewable Energy and landscape conservation.Currently there is a misalignment between national target and regional regulations, which causes a delay during the single authorization procedure, also, the adoption of the new procedure PAUR (Procedura Autorizzativa Unica Regionale), that should ensure shorter and, above all, more reliable authorization times for renewable energy installations that are still pending to be adopted in some regions.

At this stage, Grupo T-Solar is working together with a group of companiesandthe principal national PV associations among the most important in Italy “the TASK FORCE PV Utility Scale” with the purpose of collaborating with institutional representatives in a coordinated manner, to:

1.   Make the PNIECobjectives realistic

2.   Support the development of photovoltaic systems on the ground by protecting and supporting agriculture

3.   Rationalization and simplification of procedures for the revival of investment and employment (especially in the South)

Prospects of new PV scenario:

What are the prospects of photovoltaics in Italy for the years to come? If we look at what has happened in recent years, the prospects should be very interesting for the sector. The Integrated National Energy and Climate Plan (PNIEC) foresees an overall increase in photovoltaic installations, more than double the average of recent years. The planned targets cannot be reached without large photovoltaic systems. With the progressive and constant lowering of construction costs, large-scale PV has reached the so-called market parity, i.e. economic viability even in the absence of incentives.

For this reason, Grupo T-Solar has started to operate on the territory again, after a period of forced stop lasted years. Our goal is to consolidate and strengthening our presence in Italy through the development, financing, and construction of new large ground-mounted plants, increasing our current installed capacity and confirming our strategy of expansion in the south European market.

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