May 6, 2009 / 1:35 PM / 8 years ago

Italy to treble solar capacity by 2010

<p>A view of solar panels in a farm in Weinbourg, Eastern France February 12, 2009.Vincent Kessler</p>

VERONA, Italy (Reuters) - Sunny Italy is expected to nearly triple photovoltaic capacity thanks to government incentives and see solar energy become competitive in 2010, sector experts said on Wednesday.

PV energy which turns sunlight into power got a boost in Italy after the incentives, among the most generous in Europe, were approved in 2007. The incentives lured investors ranging from families to sports car maker Ferrari.

"If the current growth pace continues, we will see a total installed capacity of 800-900 megawatt (MW) in 2009 and about 1,200-1,300 MW by the end of 2010," Gerardo Montanino, managing director of state-run power management agency GSE told Reuters.

Total installed PV capacity now stands at 450 MW with about 37,000 operating installations, according to GSE's latest estimate.

A 1,200 MW cap is put on capacity to be covered by incentives and once reached, the incentives will be extended for another 14 months to provide for the sector continuity.

The government, which has spent about 150 million euros ($199.7 million) on the PV incentives since 2007, has yet to decide whether to introduce new incentives after that, Montanino said on the sidelines of a PV conference in northern Italy.

First to Reach Grid Parity

Abundant sunshine, the highest power prices in Europe and a sharp fall in PV module prices due to global oversupply, should help Italy reach grid parity next year, sector executives said.

"Italy is the first large-scale market where it will happen ... It is certainly going to be next year," Anton Milner, chief executive of the world's biggest maker of solar cells, Q-Cells, told the conference.

Italy's residential segment of the PV market -- the main driver of growth so far -- will be the first to reach grid parity, followed by commercial consumers, mostly supermarkets which put solar panels on their roofs in 2012, Milner said.

Industrial-size PV segment was likely to reach grid parity around 2015 mostly due to an expected increase in costs of gas-fired power generation, which accounts for a lion's part of all electricity produced in Italy, he said.

California in the United States, Spain and Germany are likely to follow Italy in reaching grid parity, several other executives said.

GSE's Montanino said the incentive scheme had cushioned the impact of the global economic downturn for the Italian PV sector where local bureaucracy and grid connection delays were still perceived as the main problems.

Many solar energy executives at the conference complained about an endless permitting process in Italy which involves authorizations from dozens of administrative bodies on various levels and is complicated by different regional laws.

For instance, Basilicata region in the south does not allow solar power plants on its turf, while another southern region, Calabria gives permits only to locally-registered companies.

"It all means lost opportunities for growth in Italy," said Dieter Ammer, chief executive of German solar company Conergy which has Italian operations.

Editing by James Jukwey

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