The Italian photovoltaic market is going through a complex period. In 2011 there was a boom of installations, but an economic situation that is now embarassing many companies. We are going to talk about it with Matteo Demofonti, business development and marketing manager at Convert Italia, a company active in the sector of energy and renewables, manufacturer of photovoltaic components and constructor of PV parks and plants.

Demofonti, what do you think about this phase of the Italian PV market?

The general impression is that in the face of a big boom of installations, companies have slowed down their production plans. Investments have been distributed evenly for new installations, but not for new staff and new facilities. Actually, from this point of view there was a sharp contraction. 2011 was not the swan song of PV, but it was close to it.

What are the hardest hit parts of the sector?

Convert, as both EPC contractor and supplier of components, is in contact with suppliers, end customers and the banking world. For these entities there has been a slowdown. Banks are much more careful in granting loans and are more interested in the soundness of the investment. In this situation of scarcity of liquidity component suppliers were the most affected. The normal trend of cost reduction was not followed; typically with a doubling of installations there are reductions by about 10% for modules and 20% for inverters, but the market was unsettled by even greater price reductions. The first to be hit by the crisis were those focused on large occasional initiatives. Also because in this phase the competition focused much more on price than quality. And this is a problem, because companies are selling below cost, see the dumping of Chinese products, supported by government incentives, reported by SolarWorld in the US.

What are the winning strategies for corporate survival in this context?

The companies that have managed to stick to their intentions on production planning and on proper growth can address this phase with less anxiety. We have always placed great emphasis on technology, a choice that pays off in the long run. For example, our single-axis tracker was difficult to introduce in the market. We built the first plant (800 kW in 2007) keeping the ownership within the company, but it then became Convert’s core business. Same thing for concentration photovoltaics, we are now harvesting the fruits of investments in research and development.

To tell the truth, the Italian CPV market does not yet seem to have taken off. What prospects can you see in the country for this segment?

Convert is about to construct the first utility-scale plants, a 2-MW plant and two 1-MW plants with MX1 CPV low concentration technology, all in Apulia. We chose the low concentration technology because it is the best suited for a large part of Italy, while high concentration is indicated only in areas with high direct radiation, such as Sicily and southern Apulia. The concentration PV market in Italy started only with the shifting of financial attention. We were just unready because in the country there is a lack of interest in the development of specific components, and also because the CPV industry is a niche at global level. Delays in the development of an Italian market are also due to the bureaucratic problem of authorisations.

Is there also a problem of access to credit for a relatively new and complex technology as the CPV compared to conventional PV?

We have worked on it because you cannot rely on a new technology without bankable funds, especially by proposing it as EPC contractor. We have invested in several investigations and reports by other companies, in preparation of the commercial offer. Now these plants are financed. Also because the fourth energy bill provided a shameless economic advantage to concentration photovoltaics.

With a view to a possible reform of incentives, what would it take to ensure survival and healthy development to the PV sector?

We have to understand if we want a comprehensive reform of renewables and if we want to have this bet and give a strong boost to the PV industry, which is however making a significant economic return even at state level. The press is attacking renewables, they always talk about the cost and never think of their return, nor the benefits. However, the new government is reassuring about this. I believe the proposal to maintain incentives to be rightful, if we do not give stability to the market there will never be a real leap forward and companies will not be able to plan. The damage in terms of credibility of the country and failed investments has already been done with the events of last year. Now there must be three key words: stability, simplification and development.