Effectiveness of Feed-In Tariff Schemes for Solar PV: The Miracle Case of Italy

Mr Piergiorgio Chelucci, KEMA

In the past two years PV technology has achieved an incredible expansion in the Italian electricity sector, with an astonishing 9GWp installed only in the past 12 months. Even more astonishing is that fact that according to GSE, the state owned company that promotes and supports renewables in Italy, PV installed capacity is projected to reach 15 GW by the end of 2012, a year-to-year increase of 20%. This success story started in 2005 with the introduction of the renewable incentive mechanism ‘Conto Energia’ (the feed-in premium scheme which provides a bonus to be paid on top of the market electricity price to the Photovoltaic generation), that was the main driver of this massive deployment of PV and the miraculous take-up of this support scheme (along with others like the all-inclusive feed-in tariff “tariffa omnicomprensiva”). Italy’s formidable case, in terms of the effectiveness of the available support schemes and responsiveness of the sector, is increasingly attracting the interest of policymakers and stakeholders in much of Europe and the rest of the world.

The aim of this article is to provide a historic overview of this incredible story, following up the regulatory set up and administration of the main support schemes, the evolution of subsidy levels, the evolving PV production costs and the rise of a new indigenous industry. Also, the article attempts to sketch a future outlook for the PV sector in Italy and levels of support, drawing lessons from other countries where similar schemes have been introduced, with varying degrees of success. Finally this paper aims to identify useful lessons from this success story for policy makers and industry stakeholders, to access the challenges ahead for the future of equivalent schemes elsewhere, especially for their seamless integration in electricity networks.

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