Italy to double solar capacity in 2010

MILAN, ITALY - Italy, Europe's third-biggest solar market, is set to double photovoltaic capacity up to 2,000 megawatts in 2010 as operators race to sign up for generous incentives before they expire, a senior sector official said.

Photovoltaic (PV) systems that turn sunlight into power have boomed in Italy since 2007 when the current government incentive scheme was launched. The support scheme is set to expire in 2010 when the capacity covered by the incentives hits a 1,200 MW cap.

Italy's state energy management agency GSE has recently revised upwards its estimate of the total installed PV capacity to 950-1,000 MW, Gerardo Montanino, the head of operations department at GSE, told Reuters on the margins of a conference.

"This year, at least 800 MW, if not 1,000 MW will be added. It will be a year of a strong boom," Montanino said.

"With very generous incentives and a considerable reduction of panel costs, people understand that such profitable conditions will not be seen again in the coming years. With cut in incentives conditions will not be so favorable next year."

The government has postponed unveiling its new incentive plan which will reduce a key feed-in tariff to reflect falls in PV module prices.

Montanino said the new plan may be presented on February 25 when a state body which should approval the plan before it goes for signing by economic development and environments ministers, is expected to be convened.

But an official at the body that oversees relations between the central government and regions said the date of the next meeting of the body called unified conference of state and regions is yet to be set.

Investors and solar energy market operators say delays in unveiling the new plan would prevent them from drafting their own strategies and slow down investment flows into Italy's solar market.