Sunday, 22 July 2012

Italy signs renewable power decrees
7 Jul 2012

MILAN, July 6 (Reuters)-Italy signed on Friday long-awaited decrees on new support schemes for solar and other renewable energy aiming to bring incentives in line with falling costs and ease the burden on consumers who pay for incentives with their bills.

Italy's green power industry has boomed in recent years as investors from around the world ranging from banks and private equity funds to utilities poured billions of euros into the sector, lured by generous support measures. With incentives ballooning above expected limits, Rome announced a plan in April to scale back production incentives for renewable energy that have inflated consumer power bills, but it took few months to iron out details. "This (new) incentive system allows us to sustain the development of renewable energy industry", Environment Minister Corrado Clini said after signing of the decrees. "Proposals from regions and suggestions from companies have been used".

The new decrees, signed by Industry, Environment and Agriculture Ministers, set a 500 million euro ($615.35 million) annual cap on new spending for incentives, including 200 million euros for solar power generation, the industry ministry said in a statement. "It is very disappointing. We hoped to have 700 million euros for photovoltaic power and even more for other renewables", Marco Pigni, director of Italy's renewable energy association APER, told Reuters.

The ministry said the new decrees simplify a procedure of logging on to a register to get incentives-a thorny issue for the renewable industry which sees it as an additional red tape. Under the solar power decree, photovoltaic plants-which turn sunlight into power-with capacity between 12 and 20 kilowatts could be exempt from having to log on to a register if they opt for a 20% cut in incentives, the ministry said. Concentrated photovoltaic power plants, innovative plants as well as those realised by public bodies would be also exempt from having to go through a register, it said.

The new incentive scheme for photovoltaic plants will begin in 45 days after a 6 billion euro cumulative annual limit on incentives is exceeded, while other renewable energy generation will switch to new regime from January 1, 2013 with a four-month transition period, the ministry said. With generous incentives in place since 2007, Italy's solar market has become the world's second-biggest after Germany and was the fastest growing market in the world in 2011.

It has attracted major solar module makers such as Chinese group Suntech Power, Trina Solar, Yingli Green Energy Holding and U.S, firms FirstSolar and SunPower Corp. "With the new incentives, there is a risk that many jobs would be lost and capital would flee abroad", APER's Pigni said. ($1 = 0.8126 euros)