Italy to limit profits made by some FIT-backed solar projects in feedback to energy crisis

• Italy's government will limit the windfall profits of some feed-in tariff-backed solar PV projects that have actually had the ability to take advantage of rising energy prices.

Solar plants with an outcome of more than 20kW that obtain repaired tariffs via the nation's Conto Energia system may need to repay profits to the nation's energy management agency GSE if they obtain "extra profit", according to Italy's ministry of financial development.

Ready to be in area from 1 February throughout of this year, the action forms part of a EUR1.7 billion (US$ 1.9 million) power package aimed at curbing power bills announced by Italy's federal government recently.

The policy has actually been greatly criticised by Paolo Rocco Visconti, president of profession association Italia Solare, that cautioned that it can harm Italy's decarbonisation efforts and dent investor confidence in the nation's solar field.

The policy "inexplicably changes previous arrangements to which the operators have properly depended, an adjustment a lot more unacceptable thinking about that there has actually been no appointment with the drivers", Paolo Rocco Viscontini wrote in a letter sent out to Italian Prime Minister Mario Draghi.

For each solar project influenced by the adjustments, there will be an estimation of the ordinary market value that it received up till the existing energy crisis started that will certainly be used to figure out how much profit requires to be repaid, according to Michele Governatori, energy program lead at energy and also climate modification brain trust ECCO.

He claimed the idea is to move these projects onto a repaired and also capped cost system. If rates go listed below a certain level, project proprietors will certainly obtain the difference from the state, however if they go above it, they will certainly have to pay the distinction.

While turning the old feed-in tariff into an income warranty plan through a dual method contract for distinctions "might be a reasonable method to make power manufacturers remarkably add to the prices of cutting costs", Governatori stated, "it is unfair as long as long as thermal power producers, energy traders as well as gas firms are not attended to by comparable levies".

The modification comes after Spain's government presented a procedure last September that limits the windfall profits of particular renewables projects with a capacity of more than 10MW that market power on the vendor market.

Industry experts elevated concerns at the time that the policy might impact financier confidence in Spain's PV field, while Iberdrola replied to its intro by stopping briefly investments in some solar projects in Spain. The utility really did not participate in the country's renewables auction in October, mentioning "regulatory uncertainty".

Elettricità Futura, an organization representing Italy's electricity market, has additionally knocked the new policy. The government's steps "have actually focused specifically on a solitary power market, renewable energy, which, as a matter of fact, is the only as well as one of the most effective option to the power crisis because of the rise in the rate of gas," said the association's head of state, Agostino Re Rebaudengo.

" When the state heavily interferes on market characteristics, there is the threat of doing greater damage to the financial system than the claimed benefits, with a certain loss of credibility towards the monetary community."