The Italian government adopted the law decree in reference, in answer to the dramatic increase of the general financial burdens of the Italian electricity system, mainly deriving from the combined effects of still growing costs of public subsidies paid for investments in renewable energy plants and of the reduction of the energy demand of the final users, who ultimately bear the costs of those regimes by paying a charge on their bill aimed at financing said general financial burdens of the electricity system.

The specific provisions

The rescheduling of the calendar for the payment of the solar tariff works as follows:

  • as from 1 July 2014, GSE pays the tariffs at the agreed deadlines, limited to 90% of the annual average production of each specific plant;
  • the balance will be calculated on the effective production and paid by the first semester of the following year, by triggering an amendment of the actual payment calendar;
  • the actual duration of the tariff payment period of the solar tariff of 20 years for plants with nominal capacity exceeding 200 kW is confirmed, but only if the owner agrees upon a cut by 8% of the already granted tariff value; where agreed upon, the cut applies only on future payments;
  • where the cut is not agreed upon, the value of the solar tariffs still to be paid for plants with nominal capacity exceeding 200 kW is reduced, whilst the incentive period is extended from the original 20 years to 24 years (both running from the original date of entry into operation of the plant); the amount of the reduction depends on the residual term of the balance of the incentive period, as shown by the attached scheme;
  • for plants with nominal capacity not exceeding 200 kW nothing changes as to the time period over which the tariff is paid and as to the tariff level;
  • the reduction of the annual payments deriving from the rescheduling can be financed within a scheme between certain banks and an Italian governmental fund itself guaranteed by the Italian State.

The decree provides that local public entities shall consent upon a prolongation of the effectiveness of the permits allowing the operation of the plants, in case the period for the payment of incentives is stretched. Conversely nothing is provided for as to the prolongation of the effectiveness of the contractual securing of the sites hosting the plants.

As from 2016 certain entities (RIU and SEU), so far totally exempted from the financing of the general financial burdens of the electricity system for the electricity not offtaken by them from the grid, will pay a fee aimed at covering the general burdens also for the electricity not offtaken from the grid. However, such fee is lower than what they would have paid if they had offtaken the electricity from the grid and can be modified with ministerial decree.

The confirmation process

The law decree shall be confirmed by both the Houses of the Italian Parliament (Camera and Senato) by 60 days as from 24 June 2014. In case of lack of confirmation it would be null and void. However, a conversion is to be expected, although with amendments.

Attachment

The following table shows the percentage of the reduction of the unitary value of the tariffs, it is the higher the shorter is the residual payment period and the so reduced unitary value will be paid for the residual term extended by the 4-year extension period provided for under the law decree). The left column shows the residual incentive period and the right column the corresponding value of the reduction.

Click here to view table.