With the removal of the feed-in tariff “Conto Energia” and numerous regulatory changes, last year has been a significant one for photovoltaics in Italy. Here is a summary of the new rules and their impacts on the market.
Among the changes hitting existing plants, the twofold modification to Prezzi Minimi Garantiti (“Guaranteed Minimum Prices”) for plants that use the Ritiro Dedicato (“dedicated withdrawal”) system is noteworthy. The guaranteed minimum price has been eliminated for plants over 100 kW receiving incentives, with the “Destinazione Italia” decree. For the other plants, an AEEG (Italian Regulatory Authority for Electricity, Gas and Water) resolution has reduced the Guaranteed Minimum Price, and the total volume of energy for which it is applicable.
According to the last edition of the Solar Energy Report by Politecnico di Milano Univesity’s Energy & Strategy Group, for ground-mounted plants over 200 kW receiving incentives, which feed into the grid 100% of the energy they produce (assuming that they are incentivated through Conto Energia IV), the measure will lead to a 2% decrease in IRR. For plants without incentives, the impact on IRR is estimated to vary between -0.5%, in the case of plants with high self-consumption, and 1.5%.
Another change on the horizon is the update, proposed by the Authority with DCO 488/2013/R/EFR, regarding the Italian net-metering policy Scambio sul Posto. This would have the greatest impact on plants that went into operation between 2011 and 2012 under the Conto Energia IV: around a 1% decrease in IRR and an extra year of payback time, according to E&S Group. Plants falling under the Conto Energia II and III will be less affected (-0.5% decrease in IRR). The effect will be negligible for new plants, which do not have access to the feed-in tariff.
The tax changes brought in by the Agenzie delle Entrate (Italian tax office) circular no. 36/E are also significant. As of 2014, certain PV systems are classified as “property assets” and, as such, are subject to taxation on cadastral income and to the review of the annual plant depreciation rate.
Another set of new rules, contained in AEEG deliberation 578/2013/R/EEL, on the other hand, has been well received by the sector. This resolution finally defines rules for SEU, Sistemi Efficienti di Utenza (“Efficient Consumption Systems”): business models which allow energy produced at customers’ homes to be sold directly to them. Thanks to self-consumption, exempt from grid charges, SEUs make PV without incentives competitive and offer customers savings with zero investment. On this front, however, there are still a number of unanswered questions surrounding possible future changes to regulations.
On the topic of energy storage, the AEEG has published a consultation document (DCO 613/2013/R/EEL), which serves as a point of reference while awaiting the definitive resolution, which should arrive within the first half of 2014.
Together, the regulatory changes in 2013 have had a significant impact above all on existing large, ground-mounted plants, hit by the changes to Guaranteed Minimum Prices and taxation. The impact of the changes is also negative for future investments in the “industrial” segment (>200kW) and for power plants (>1 MW), so far as to make economic sustainability in grid-parity very difficult to achieve without a significant amount of self-consumption. Thanks to the SEUs, plants under 200 kW still have the best prospects, as net-metering Scambio sul Posto remains viable, despite the changes.