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Italy: Political Frame Condition Update
The change at the helm of government in Italy has already had some positive effects on the solar thermal sector. The tax credit extensions were confirmed earlier than in the years before. At the beginning of December, the government approved the extension until 31 December 2012 under the current conditions. If they had not done so, the tax reduction would have expired at the end of 2011. According to the current regulations – in place since January 2011 – residential customers can deduct 55 % of the investment costs from their income tax during a period of 10 years.
The first measures of Law Number 28 (approved on 3 March 2011) are already in place: Since 1 October 2011, all new and refurbished buildings must meet at least 50 % of their hot water demand by a renewable heating source or by district heating. From 1 January 2012 onwards, new and refurbished buildings must also cover 20 % of their heating demand by renewable sources or district heating. The law is automatically adopted nationwide, but regions can ask for stricter requirements.
In its presentation held at the European Solar Thermal Energy Conference (ESTEC) in October 2011, the Italian solar thermal association Assolterm describes the renewable obligation as “not very appealing to the solar thermal market unless the regions broaden the scope or reduce the number of allowed energy sources”. This is because the obligation is technology-neutral, meaning the requirements can be met by different technologies, such as a biomass boiler or a heat pump installation.
In addition, the regulation only addresses new buildings and large renovation projects involving non-relevant portions of the building stock.
Still, this is about all which can be clearly said about the frame conditions for the Italian solar thermal market in the coming months. What has been entirely in the dark until now is when and how the new solar feed-in tariff will come into force, something that is stipulated in Law 28 as well. The feed-in tariff should apply to all renewable heating technologies, which means also to solar thermal systems. It should be paid over a period of 10 years to users of smaller systems (size not defined yet) in relation to the metered solar yield of the system.
The next step seems to be the drafting of an implementation decree - whose publication, however, has been postponed for months by the responsible Ministry of Industry. Originally, the law foresaw further requirements and application rules within 6 months after coming into effect. The respective deadline would have been 3 September 2011. As of 21 December, the ministry has still not officially announced on how it wants to proceed.