Timing: Expected to be in force as of 1 July 2012 (assuming €6bln annual budget is reached) but may be 1 October 2012 due to the approval of the law by Parliament
Available budget: €500m p.a. until 31 December 2014
Technology promoted: Focus on small (1 - 20kW) roof mounted solar PV plants as opposed to larger solar PV plants (which are subject to central registration (GSE))
Threshold for registration: Requirement to register with the central GSE register for plants >20kW; if required to register, one off fee (ranging from €80 to €2,200 depending on size of plant)
Registration priority criteria: Roof mounted on energy efficient buildings treated preferentially; for ground mounted, brownfield sites preferred
Tariffs: Reduction of tariff levels for all sizes of plant (32%-36%) to bring in line with other European member states
Premium: Innovative technology and Concentrated Solar Power (CSP) to receive a premium
The fifth energy bill (“EB 5”) was expected both by industry and the market as the budget of €6bln has almost been reached and Italy’s 20-20-20 renewable energy targets have almost been achieved. In fact, the Italian Government intends to set an ambitious target of 26% which exceeds the European target.
Of importance to the manufacturing and industrial engineering sectors is the fact that EB 5 still incentivises medium sized rooftop pv installations on commercial buildings. With increasing energy prices and greater pressure to comply with clean energy targets, companies operating in this sector may still find it advantageous to proceed with pv installations as part of their energy mix.
As always the devil is in the detail and it will be important to assess whether the Italian Authority for Gas and Electricity and State-Regions Conference alleviate some of the more stringent aspects of EB 5 such as raising the cap on larger plants.
EB5 in detail
The first official draft EB 5 was made available on 13 April 2012 by the Ministry of Economic Development, but it highly likely that changes will be made by the time it is approved, some of which may be substantial. It is expected to enter into force as of 1 July 2012 or 1 October 2012 at the latest, depending on how fast the approval process is.
Three types of solar technology are covered by EB 5:
Traditional solar PV plants
Concentrated Solar Power (CSP)
The EB 5 applies to those plants entering into operation from 1 July 2012 (or from 1 September 2012) (assuming €6bln budget is reached).
Tariff levels vary according to the size of the plant and the technology used. Tariffs are still guaranteed for 20 years and are not indexed, as is in the older EB’s. Click here to see the tariffs for the first two semesters from when EB 5 comes into force.
The number of plants which can be installed in a given semester are limited as follows:
for traditional solar PV plants, those which have a annual indicative cost within a given semester of €80m;
for, those which have a annual indicative cost within a given semester of €10m;
for CSP, those which have a annual indicative cost within a given semester of €10m.
It is worth noting that there are additional eligibility criteria for traditional solar PV plants (irrespective of the size of the plant). Traditional solar PV plants must comply with the eligibility of the Fourth Energy Bill (“EB 4”) as well as at least one of the following criteria: (i) the building on which the plant is installed must have a current Energy Performance Certificate which complies with National Guidelines, (ii) the plant replaces roofing containing asbestos, (iii) the installation is on glasshouses, pergolas etc, or (iv) the installation is on contaminated land or landfill sites. For innovative technology plants and CSP, the generating capacity range is 1kW to 5MW. Technical eligibility criteria are set out in the schedules to EB 5.
For those plants to be entered on the Central Register (ie >20kW (according to the latest rumours), the tariffs will be granted according to certain priority criteria. The criteria of note (in order of priority) are: (i) buildings with an EPC certificate (D class), (ii) installations on roofings containing asbestos, (iii) agricultural installations with a generatiting capacity less than 200kW, (iv) plants commissioned by local councils with a population of 5,000 or less, and (v) installations on greenhouses, pergolas and canopies/sheds.
Under EB 4, plants with a generating capacity up to 200 kW commissioned within the net metering framework (as described in the EB 4) were classified as “small plants”. Such plants were not required to be entered on the Central Register and automatically benefited from the relevant applicable feed in tariff. Under EB 5, there is no distinction between small and large plants. Only those plants up to 12 kW will automatically benefit from the applicable feed in tariffs. All other plants must be listed on the GSE Central Register. From 1 July 2012 (or 1 September 2012 as the case may be), the feed in tariff regime will change from a premium tariff regime to an all-comprehensive tariff regime, meaning that there will no longer be minimum guaranteed prices for the indirect sale of electricity to the grid through GSE.
Other points to note
The GSE registration may not be assigned to third parties.
If an installation is moved from one site to another, it will lead to the loss of the original tariff level.