Italian solar goal tough but reachable

Italy Solar PV Growth accelerates as installations target 2,500 MW in 2010, driven by incentives, photovoltaic modules, and utility-scale farms, despite permitting and grid-connection bottlenecks; 2011-2013 support scheme trims tariffs but sustains renewable returns.

Italy's goal of doubling solar power capacity in 2010 is tough due to red tape and grid link-up problems but reachable as operators race to get projects started before cuts in financial incentives, the head of an industry body said.

Italy, Europe's second-fastest growing solar market, plans to add 1,300 megawatts of photovoltaic PV systems in 2010 as it moves to double solar capacity to reach an overall installed capacity of some 2,500 MW this year.

"It is a big challenge... 1,200-1,300 MW of new installations a year is a very big number," Gert Gremes, chairman of Italy's PV association GIFI, told Reuters.

"If big-size installations built in the south are connected to the grid, these figures could be achieved," he said on the sidelines of a solar conference.

Gremes said notoriously lengthy process for planning approval permits and grid connection remain the main problem for PV operators in Italy.

Many projects have also recently had difficulties finding PV system installers because of a rush to get projects on stream before the end of Italy's financial incentive scheme, considered among the most generous in Europe, he said.

Italy's new support plan for solar power in 2011-2013, which foresees an incentive cut of about 20 percent in line with a fall in solar modules costs, should be approved by the end of May, Italy's Industry Ministry said.

The pace of new installation growth is likely to slow down in the first three months of 2011 after this year's surge but would pick up later next year because the new incentive scheme is seen as ensuring, with grid parity pricing in sight, "interesting returns" for the next three year, Gremes said.

Italy's PV market is set for steady growth at least until 2015, with a slight slowdown early next year as the sector digests the incentive cut, Domenico Sartore, chief executive of Solon SpA, an Italian unit of German solar module maker Solon, also told Reuters at the conference.

PV installations have mushroomed in Italy since 2007 on the back of the current incentive scheme which lures investors ranging from individual families to utilities and sports car maker Ferrari.

With a total installed PV capacity of about 1,140 MW at the end of 2009 and on track to reach 7,000 MW in the near term, Italy is Europe's third-biggest solar power producer after Germany and Spain.

GIFI expects Italy's total PV capacity to rise to 15,000 MW in 2020, well above the government 2020 solar target of 8,000 MW, Gremes said confirming earlier forecasts.

In order to support this growth, Italian manufacturers of PV cells and modules which are very small in number and individual capacity compared to international rivals, should join forces and form alliances or merge, Gremes said.

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