Market Trends of Italy Distributed Solar Power Generation Industry
This section covers the major market trends shaping the Italy Distributed Solar Power Generation market according to our research experts:
Increasing Demand from Residential Sector
- According to the Italian Renewable Energy Association Anie Rinnovabli, Italy deployed around 436.5 MW of new solar PV systems in 2018. The association has also stated that the Italian solar PV market was mainly driven by solar rooftops for the past four years.
- Out of the newly added solar PV capacity in 2018, 389.6 MW was represented by solar rooftops with a capacity of up to 1 MW. Residential systems not exceeding 20 kW accounted for the largest share in the newly added solar rooftop capacity, followed by arrays with a power range of 20-100 kW supplying a total capacity of 75.8 MW.
- Adding to this, the solar PV capacity installations during Q1-2019 were the highest when compared to Q1-2018 and Q1-2017. The installed solar PV capacity between January 2019 and March 2019 stood at 105.3 MW, representing an increase of approximately 18% over the installed capacity in Q1-2018. Of the total installed capacity in Q1-2019, more than half of the installed capacity came from residential PV systems of up to 20 kW capacity.
- The 2019 Budget Law of Italy has extended the bonus for the installation of residential solar PV systems till December 31, 2019. Under this, the tax deduction amounts to 50% up to a maximum expenditure of EUR 96,000 per single housing unit and is divided into 10 equal annual quotes.
- Therefore, based on above-mentioned points, residential sector is likely to witness significant demand for distributed solar power generation market in Italy over the forecast period.
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Ambitious Solar PV Targets and Supportive Incentives Driving the Market
- The Italian government's promotion and feed-in tariff system for renewable energy sources have been encouraging the renewable energy sector over the past several years. The FiT program - Conto Energia, which has been operating in Italy since the end of 2005, guaranteed a significant growth in the solar photovoltaic (PV) sector during its operations. Adding to this, declining costs, new incentives, and ambitious EU goals for renewables are driving the distributed solar power generation market in Italy.
- Most of Italy's 20 GW of installed solar PV capacity is represented by megawatt-sized projects developed under the five rounds of the Conto Energia feed-in tariff scheme. The country is also targeting around 50 GW of installed solar generation capacity by 2030.
- In June 2019, a new auction and incentive scheme for renewable energy in Italy was approved by the European Commission. The EU Commission stated that under the proposed EUR 5.4 billion program, renewable energy projects are expected to receive a premium tariff on top of the market price of electricity if the clean power is more expensive of the two. This premium cannot be higher than the difference between the average production cost for each renewable technology and the market price.
- Around 4.8 GW of renewable energy capacity is expected to be contracted through auctions planned during the next 30 months from June 2019. The first two procurement rounds would see around 500 MW of capacity allocated. In rounds three to five, each tender might assign 700 MW. For the final two exercises, the contracted capacity will reach 800 MW.
- The program approved by the EU Commission also includes a series of tenders for renewable energy projects with a capacity of between 20 kW and 1 MW. A first series of tenders is expected to be dedicated to solar and wind projects and will have a combined capacity of 650 MW. The Italian plan also includes incentives for rooftop PV projects totaling 600 MW of capacity.
