Italy's FiT scheme may end by 2013 on melting budget - IMS Research

Jul 24, 2012 - Without additional budget or urgent changes to the existing incentive scheme the solar power market in Italy will need to survive without feed-in tariffs (FiTs) from 2013 on, warns IMS Research.

The market intelligence firm, which was recently acquired by IHS Inc (NYSE:IHS), explained that the budget for the Conto Energia V solar FiT scheme, which is to come into effect on August 27 this year, may be more than 50% lower than planned due to a rush by project developers to get the bigger tariffs of the previous FiT plan. Conto Energia V was initially expected to support some 7.5 GW of fresh solar capacity. If its budget gets cut, however, installations are to plunge to some 3 GW, IMS said, adding that this might mean that Italy would fall outside the top-three solar markets for the first time in half a decade.

In the middle of July the Gestore dei Servizi Energetici (GSE), the ministry-appointed body in charge of renewable energy subsidies, said that the annual cost of solar incentives had hit EUR 6 billion (USD 7.3bn). This threshold marked the start of a 45-day notice period for the launch of the next FiT scheme -- Conto Energia V. The scheme's budget is planned at EUR 700 million, so that the solar incentives in Italy will end once the total annual cost reaches EUR 6.7 billion. According to IMS, many solar projects have been wrapped up in the first six months of 2012 to take higher FiTs. These installations, the firm says in its market study, have already brought the annual cost to EUR 6.4 billion, leaving only EUR 300 million in the Conto Energia V budget.

"Italy does have favorable conditions for PV and some installations will continue without incentives, particularly in the south of the country, but this will not be enough to maintain the market at its current size for some years," said Sam Wilkinson, senior PV analyst at IMS.

(EUR 1 = USD 1.213)

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