Italy imposes retroactive changes to feed-in tariff for solar PV

Source: www.renco.it

Renewables International

Last Thursday the Italian parliament and senate in Rome have voted in favor of retroactive changes to the feed-in tariff scheme for solar power. Among other changes, operators of PV systems larger than 200 kW must now choose one of three options for changes.

Source: www.renco.it
Source: www.renco.it

Operators of PV systems larger than 200 kW in Italy face a difficult choice. (1) Depending on the system size, they can accept a 6-8% cut of the FIT rate they receive per kWh or (2) they can decide to cut their FIT rate by 17-25% and extend the payment period from 20 to 24 years in exchange. The operators would get less money per kWh, but for a longer period. (3) The last option also leads to deep immediate cuts to the FIT rate, but instead of an extension of payment period, the FIT rate will increase once again after 2020. The last option was added to the bill, because some of these systems are built on leased roofs / land, which often makes it impossible to extend the payment period.

In addition to this choice, operators of systems larger than 200 kW will no longer receive their full FIT payments immediately at the end of each month. Instead, 10% of the regular payments will be withheld until the annual accounts in June of the following year. On the basis of the annual actual generation, the remainder will then be paid out.

Will this work?

The entire push for retroactive changes to the legal framework for solar power appears to be driven by the wish to lower electricity prices for businesses. Whether or not this goal can be achieved by changing the FIT scheme for some PV operators retroactively remains to be seen. There is no guarantee that the resulting minor reduction of solar power will lower prices for commercial & residential customers. The difference could very well end up as profit for power companies.

More likely, retroactive changes to legal frameworks will harm investor confidence in Italy, something that is easy to loose and difficult to gain.

Source: Renewables International. Reproduced with permission.

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