Italy to Slash Solar Subsidies

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Italy looks set to become the latest European country to slash solar power subsidies when a new tariff scheme is unveiled by the government next week.

The undersecretary for the Ministry for Economic Development, Stefano Saglia, indicated that the government intends to introduce a cap, similar to the German model, whereby incentives will be cut once a certain amount of installed capacity is reached. He also revealed that the government will end all solar incentives by 2017, claiming solar will have reached parity with other sources of electricity by then.

The current, generous incentives were due to run between 2011 and 2013, but the government has since ruled that this will now only apply to solar power projects that connect to the national grid by the end of May. The nation's leading renewable energy body, APER, claimed the forthcoming cuts will result in the loss of billions of euros in investment in the renewable sector. At the end of 2010, Italy had an installed solar capacity of about 3,000 megawatts (MW), and the sector's industry body, GIFI, had predicted--before the proposed tariff cuts--that up to 5,000 MW more would be added this year.

The move echoes similar decisions taken by other European countries, including Germany, Spain, France and, most recently, the U.K. Last month, the U.K. government came under fire from the solar sector after it was accused of strangling the fledgling solar market 'at birth'. For additional information, see March 25, 2011, article - U.K. Solar Industry 'Strangled At Birth'. The government has proposed slashing its feed-in tariff for large solar power projects by up to 70% from August 1.

The European Union is concerned about Italy's planned cuts and has warned the government to put in place a predictable support scheme to give investors confidence.

"It is fundamental that the Italian government creates as soon as possible a clear, stable and predictable internal framework for incentives to guarantee the development of renewable energy," said E.U. Energy Commissioner Günther Oettinger in a letter to the Italian Minister of Industry.

The solar cuts come at a time when Italy is reviewing its stance on nuclear power, following the ongoing disaster at the Japanese Fukushima Daiichi nuclear power plant. Italy's government was in favour of returning to nuclear power after a 24-year ban, but has now decided on a one-year moratorium for a planned public referendum on the issue, fearing that Italian voters will turn against nuclear power due to the events in Japan. For additional information, see March 31, 2011, article - Italy Freezes Nuclear Plans.

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