Italy removed a much feared cap on incentives for solar power production on Thursday when it set new rules for renewable energy, but other measures in the package could slow down solar growth.
A new renewable energy decree by the Italian Government, part of the European Union’s efforts to fight climate change, removed an 8,000 megawatt limit on photovoltaic production incentives, which had been expected to rein in galloping growth of the Italian sector.
The cap had been included in a previous draft of the decree.
“No cut, no cap, no stop to the manufacturing sector development has ever been envisaged,” Industry Minister Paolo Romano said in a statement, adding the decree aimed to boost productivity in the renewable energy sector and offset financial speculation, which weighs on Italian power bills.
Six associations representing solar operators said in a joint statement, however, they were concerned about the “grave consequences” the decree would have on the photovoltaic sector.
The current solar power incentives, which originally were supposed to run to 2013 with a gradual reduction of support, will apply only to plants that connect to the grid by the end of May, according to the text of the decree approved by the government.
Italy’s government will draft a new support scheme by the end of April for plants that connect to the grid after June 1, which will set a annual cap on the cumulative capacity eligible for incentives.