EU Tells Italy to Keep Solar Incentives Stable

Source: Reuters  (4/18/11)

"Investors fear government will introduce an annual limit on installed photovoltaic capacity, braking sector growth."


The European Union's energy chief urged Italy to set up a clear and predictable support scheme for the solar energy sector and ensure stability for investors to avoid possible penalties.

Under a law passed in Italy in March, current generous incentives to the booming solar market—originally expected to run from 2011 to 2013—will apply only to those solar plants that connect to the grid by the end of May.

The law was issued in compliance with the EU's directive on 2020 green energy targets but the sudden change in the support scheme has caused uproar among investors and operators about the future of business in one of Europe's biggest solar markets. EU Energy Commissioner Guenther Oettinger said in a letter to Italy's Industry Minister Paolo Romani he was concerned about consequences of such changes for investment in the renewable energy sector after receiving complaints from sector operators.

"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," Oettinger said in the letter, a copy of which was obtained by Reuters.

Italy's solar sector has boomed since 2007, when extensive production incentives were first launched. It has attracted the world's biggest photovoltaic module makers.

Italy plans to put a six-monthly or annual cap on solar incentive costs rather than on installed capacity under the new solar support scheme and aims to scrap incentives from 2017, Industry Undersecretary Stefano Saglia said last week.

Solar sector operators and investors fear the government will introduce an annual limit on installed photovoltaic capacity, saying such a move would brake growth of the sector in Italy, as has happened in Spain.