Timing: In force as of 27 August 2012

Available budget: €500m over 5 semesters

Technology promoted: Small (1 – 20kW) roof mounted solar PV plants are encouraged 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; plants between 12kW and 20kW do not have to register if a 20% tariff reduction is accepted

Registration priority criteria: Roof mounted on energy efficient buildings treated preferentially; for ground mounted, brownfield sites preferred; registers open every six months

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 long awaited Fifth Energy Bill (“EB 5”) shall come into force on 27 August 2012, as long as the €6bln threshold has been reached. Latest figures confirm that the threshold has already been surpassed. The overall budget set aside under the EB 5 is €6.7bln. Once this target is reached, EB 5 will fall away.

It is expected that grid parity (i.e. the cost of solar PV electricity is the same as traditional energy source electricity such as fossil fuels) will be achieved before or by the time the budget threshold is reached.

Italy’s renewable electrical energy target has been raised to between 32% and 35%. This is good news but the reduced budget available for solar PV, whilst it has not come as a surprise, will limit the number of projects which will be economically viable. The Italian Government has announced that it does not want to be spending more than €12bln per year on renewable subsidies in the year 2020. The current spend for this year is €9bln.

The message is clear: the Italian Government is moving from a finance/investment based approach to an energy infrastructure based approach. Solar PV will have an ever decreasing entitlement to state incentives.

There is still room for solar PV in the renewable energy mix. Micro PV plants are clearly the focus of EB 5 meaning that the reduced budget will go further. Whilst this may mean a shift in business model for many larger and smaller solar developers, the tariffs available still make the smaller plant projects viable. As to whether post grid parity projects will sustain investor IRR expectations no one can tell at this time.

EB 5 in detail


EB 5 will come into force on 27 August 2012. No key changes proposed by industry have been made to the draft that was submitted to the State-Regions in July, with the exception of the non-requirement to register up to 20kW. However, the 20% reduction in tariff for plants between 12kW and 20kW will clearly impact and restrict the viability of not registering.

Eligible technology

Three types of solar technology are covered by EB 5:

  • Traditional solar PV plants
  • Innovative technology
  • Concentrated Solar Power (CSP)

Subject to the threshold limit and the 30 day period being complied with, EB 5 applies to those plants entering into operation from 27 August 2012.

Tariff levels

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. The tariffs are split into semesters from when EB 5 enters into force and are set out below. It is worth noting by way of example, under EB 4, 3kW received a tariff of 352 €MW/h, 200kW 313 €/MWh and 1MW 236 €MW/h. Under EB 5 the corresponding figures are 237 €/MWh, 199 €/MWh and 161 €/MWh:

Traditional solar PV plants

Breakdown of traditional solar PV plants tariff levels

Eligibility criteria

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 innovative technology plants, those which have a annual indicative cost within a given semester of €10m; and
  • for CSP, those which have a annual indicative cost within a given semester of €10m.

For those plants to be entered on the Central Register (ie >20kW) the tariffs will be granted according to certain priority criteria. The key criteria (in order of priority) are: (i) buildings with an EPC certificate (D class), (ii) installations on roofings containing asbestos, (iii) agricultural installations with a generating 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.

Net metering

From 27 August 2012 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.