The Italian photovoltaic market substantially increased in 2008 (+150/160% compared to 2007) and gained the attention of many foreign enterprises, which were attracted by the Italian so called “Conto Energia” (Energy Account, in English). The “Conto Energia” is a set of incentives instituted by the Italian Department for the Economic Development, jointly with the Department of Environment and the State-Regions Joint Conference, implementing European Directive 2001/77 EC on the development of renewable sources energy. The Directive intends to improve the European energy internal market by encouraging the use of renewable energy sources: according to such Directive, each European state must adopt legislation promoting the electric energy system based on renewable energies. The “Conto Energia” provides incentivized rates for individuals, companies and public entities setting up a photovoltaic system with a power not lower than 1kW, as well as awards additional economic benefits to photovoltaic systems that use energy in an efficient way.
Italy and Europe: an Attractive Market for Investors. Also thanks to the “Conto Energia”, Italy has progressively become and continues to be a very interesting market for foreign enterprises and investors, because Germany and Spain, which are the main players in the field, since 2007 have gradually cut down public incentives previously offered to the photovoltaic industry. Italy is thus becoming a sort of a “treasure chest”, as it is currently offering the highest incentives in Europe.
In fact, it may be interesting to highlight that new photovoltaic systems installed in Spain in 2008 are higher than those installed in Germany in the same year: Spain has exceeded 2.6 GW, while Germany’s installations reached 1.3 GW. On the other hand, Germany holds the worldwide pole position in equipments, since it exceeds 5.2 GW, while Spain, Japan and the U.S. follow. Europe as a whole is the main market for the photovoltaic industry, with approximately 80% of the worldwide installed power, equal to almost 10 GW at the end of 2008. According to most forecasts, the Europeans will continue to lead in this industry, as they are the first ones to have started such operations and have the strongest experience in the field.
Italian Market…But Benefits Abroad? Even though Italy holds the fifth place in the worldwide rankings, experts wonder how much of the value invested in Italy actually remains in Italy. In order to answer this question, the domestic market must be examined in depth by carefully evaluating the role of Italian companies. According to the most recent studies, Italy encompasses approximately a thousand companies with different structures and sizes that are active in the photovoltaic industry: they include banks, insurance companies, traders, but also small and medium enterprises. Still, unlike the wind power industry, where the Italians are main players, the photovoltaic industry retains just a small portion of the matured business, since Italian companies are mainly (74%) involved in the first phase of distribution and set-up of solar plants, decrease to 38% in the following phase dedicated to the production of cells and modules, and lastly amount to a mere 2% in the segment of production and sale of sylicium, which is imported in the ratio of 98%. Sylicium is used as mono-polycrystalline-sylicium in about 90% of the technologies employed, with the remaining 10% using the thin-film technology using minimal quantities of sylicium in order to create solar panels.
Analysis of the Italian Market. The main area in which the photovoltaic industry is active in Italy is the residential field; the industrial applications and the photovoltaic stations, albeit impressively increased by 31% in 2008, still lag behind. Such data may be broken down also with regard to the geographic structure of the market, which may suggest the most convenient areas to install solar power plants. In this regard, the Ren Lab project, born in March 2009 thanks to the cooperation of the Milan Politecnico university, researched the business opportunities in Italy in connection with the four main branches of renewable energies, i.e., photovoltaic, aeolian, hydroelectric and biomasses markets. The Ren Lab project also indicated that the least used agricultural areas may be fine locations for plants and suggested that, if such areas were used, the installed power could be subject to strong increase. In fact, a mere 2% exploitation of the agricultural fields around the Italian towns of Lodi, Pavia and Mantova would trigger a power of 5GW that could be installed within 2020. Additionally, the Director of the “Energy and Strategy Group” of the Milan Politecnico, Prof. Vittorio Chiesa, indicated that “In addition to ground-plants, the main opportunities to increase the power are found in middle-size plants: e.g., shopping malls and industrial sheds.” Further, if the residential market, which currently seems to be very responsive to the incentives for photovoltaic energy, installs at least 1kW per house, one additional GW could be installed within 2020.
The Photovoltaic Distribution along the Peninsula. Italy offers some specific examples of investments in the photovoltaic field: in this regard, the regions of Lombardy, Emilia Romagna and Veneto have much focused on photovoltaic investments and now encompass altogether around 34% of all national plants. In the meanwhile, the region of Puglia holds the first position in Italy for the quantity of produced power, with 12.5% of the national power. Furthermore, according to some experts, regions lying in Southern Italy could greatly expand their production of photovoltaic energy thanks to their geographical location affording them substantial exposition to the sun.
Administrative and Tax Burdens in the Photovoltaic Industry. Italian bureaucracy has often risked to “turn off the sun”. In fact, energetic plants require numerous authorizations from public, territorial and governmental entities like municipalities and governmental departments (first of all, the centralized Department for the Economic Development). Building permits are issued by public administration entities, to which the notification so called “Denuncia di Inizio Attività” (“D.I.A.”), an administrative document required in case of maintenance, restoration and renovation of buildings, must also be submitted. All such administrative steps have been required because photovoltaic plants have normally been classified as buildings, thus requiring either building permits or the above mentioned D.I.A.. However, Legislative Decree no. 115 of 2008, implementing European Directive 2006/32 EC concerning efficient energy use, has lightened the bureaucracy’s weight in the photovoltaic field and erased the requirement of D.I.A. for some plants having certain requirements. In this regard, the Decree specifies that “operations concerning the energetic efficiency increase requiring (…) solar or photovoltaic roof systems, having the same pitch and orientation of the slope, whose components do not modify the buildings’ shape, are considered as ordinary maintenance operations and so they are not subject to the D.I.A. requirement, if the systems’ area does not exceed the roof area itself. In such case, a preventive notice to the Municipality is deemed sufficient”. Some Italian Regions had already modified the administrative requirements for the photovoltaic plants before such Legislative Decree was enacted: in particular, the D.I.A. was expressly declared “not necessary” with reference to some photovoltaic panels (see Lazio Regulation No. 26 of December 28, 2007).
In addition, Italy’s tax system may be an obstacle to the photovoltaic development: a decision of the Territorial Agency in 2008, for example, stated that photovoltaic stations are subject to “ICI”, a local tax to which buildings are subject: while such tax does not apply to solar roof panels used by consumers, it applies to fixed ground panels forming energy stations, since these latter are classified as turbine factories. As a consequence, potential investors must face high costs, negatively impacting the investment phase: in fact, according to Assosolare, an additional amount of approximately 30,000 Euro per MW must be paid every year for the ICI tax.
What About Financing? Photovoltaic systems typically require a high leverage of financing. As to the availability of banks’ financing, many banks currently do not have adequate economic reserves to increase their lending in such projects, other banks are simply slow in granting loans, while other banking institutions have yet to include this industry among their areas of financing.
Although Italian solar energy projects have been financed to a lesser extent than in Spain and Germany, there appears to be a vibrant market of equity investment on Italian projects. While some worry that the high economic returns targeted by equity investors may not be supported by Italian projects since they tend to be of a small size thus having lower economic returns, others strongly believe that in 2010 financing for renewable energies will sharply increase. In fact, it is expected that lending from banks and financing from equity investors may rapidly increase, as they both get more familiar with the peculiarities of the photovoltaic industry.
[www.italylegalfocus.com]
No related media.