The competitiveness decree1 (Decreto competitività), was published in the Italian Official Gazette on 20 August 2014 andcame into force on 21 August 2014.

The main provisions regarding the Photovoltaic (PV) sector are described, in brief, below.

Feed-in tariff (FIT) awarded to photovoltaic plants (PV plants)

Payment mechanics

The Decree changes the mechanics under which the GSE pays the FIT to PV electricity producers. Starting from the second half of 2014, GSE will pay incentives in monthly instalments, in an amount equal to 90 per cent of the power plant’s estimated annual electricity production, based on GSE’s historic records for the relevant plant. The remaining balance will be paid by the GSE on or before 30 June of the year following the year of production. The GSE is to clarify the detailsof such payment mechanics by 4 September (i.e. within 15 days following the publication of the Decree).

FIT Options

Starting from 1 January 2015, the FIT awarded to PV plants with nominal capacity exceeding 200 Kw is to be re-calculated, with the producer choosing one of the following re-calculation options:

FIT period extension: FIT awarded to a PV plant will be extended from 20 to 24 years. This extension will entail a re-calculation of the amount of the awarded tariff, which will vary depending on the remaining incentive period, as per the table below.

Click here to view table.

FIT re-modulation: The FIT, which will be maintained for the original 20 year period of duration,  will be re-modulated providing for a first period during which the FIT will be reduced in respect to the current awarded tariff and a second period in which the tariff will be increased in a measure equal to the previous reduction. The percentage of the reduction will be set by means of a Ministerial Decree to be issued by 1 October 2014.

FIT cut: The FIT, which will be maintained for the original 20 year period of duration, will be discounted with regard to the originally awarded tariff for the residual incentive tariff period according to the following percentages:

  • 6% for PV plants with nominal power from 200Kw to 500Kw;
  • 7% for PV plants with nominal power from 500Kw to 900Kw; and
  • 8% for PV plants with nominal power higher than 900Kw.

The producer must opt for one of the 3 options above and communicate its choice to the GSE by and no later than 30 November 2014. Should the GSE not receive any communication from the producer by such date, the FIT cut option as per 1.2 (3) above will be applied.

Notwithstanding the obligation to opt for one of the above FIT schemes before  30 November 2014, the Decree provides a further option consisting of a sort of “securitisation” of up to 80 per cent of the residual FIT. Paragraph 7 of article 26 of the Decree provides that producers of renewable energy of any source entitled to receive any kind of incentives, can transfer a percentage (up to 80%) of such incentive to a buyer selected from the leading European finance operators. For PV plants electing to take this option, the FIT reduction options indicated under 1, 2 and 3 above will no longer apply to the quota of the FIT transferred, starting from the date of effectiveness of such transfer.

By 19 November 2014 (i.e. within 90 days of the Decree entering into force) the Authority shall issue a resolution setting the rules for the implementation of the above procedure.

However, the effectiveness of this provision is subject to verification by the Ministry of Economy that the outcomes of this measure comply with the public finance commitments undertaken within the EU framework.

Additional provisions

  • Cassa Depositi e Prestiti fund/guarantee: PV plants affected by any of the measures above described above will be compensated by receiving an entitlement to apply for bank loans, which may benefit from funding or guarantees from Cassa Depositi e Prestiti S.p.A., for a maximum amount equal to the difference between the value of the incentive originally granted (as of 31 December 2014) and the new, re-formulated incentive. Cassa Depositi e Prestiti S.p.A.’s commitments will benefit from State guarantees.
  • Regional authorisations: In line with the extension of the incentive tariff period from 20 to 24 years, regions and municipalities will amend correspondingly the period of validity of the permits granted for the construction and operation of those PV plants affected by the Decree;
  • Existing loans: the Decree encourages the Government to pursue any useful initiative which supports  the Decree’s provisions, including agreements with the banks to simplify the borrower’s early termination of the loans granted to PV plants.

Other provisions on energy

Energy bills

The Decree contains a set of rules regarding the energy sector aimed at reducing electricity costs for consumers and SMEs including:

  • cutting electricity bills in favour of low and medium voltage final clients;
  • Re-modulation and reduction in transmission and distribution fees and costs;

GSE’s fees

The fees and costs of the administrative body in charge of managing the energy sector (the GSE, or Gestore Servizi Energetici) relating to monitoring and managing the renewable energy incentive scheme will be paid directly by the renewable energy producers which receive the incentives.

Net metering

The threshold for eligibility for the net metering scheme has been increased to 500kW for renewable plants that will enter into operation after 1 January 2015.

Simplification of authorisation procedures

Decree 28/2011 (the Romani Decree) will be modified in order to introduce a simplified regime for the authorisation procedures concerning energy efficiency projects and the construction and operation of small photovoltaic plants and bio-methane plants.

Biofuels

Law 24 December 2007 (the Budget law) will be modified in order to give incentives to the biogas and biomass industries, excluding biofuels (but including bio liquids obtained from agricultural products that follow the traceability requirements according to the RED Directive 2009/29/EU).