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Italy delays new solar plan again, industry worried

MILAN (Reuters) - The Italian government has delayed again a long-awaited unveiling of a new incentive plan for the booming solar energy sector, government officials said on Wednesday, fuelling concerns among market operators.

A new date for presentation of the plan is yet to be set, the officials said.

The presentation had been widely expected on February 25 when a state body which should approve the plan before it goes for signing by economic development and environment ministers was expected to be convened.

“The unified conference of state and regions has not been called for tomorrow. The new date is yet to be called,” said an official at the state body that oversees relations between the central government and regions.

Two other government spokesmen also said the new incentive plan would not be presented on Thursday.

Aiming to bring incentives in line with falling sector costs, Rome plans to cut the current scheme that is among the most generous in Europe and has given a boost to Italy’s photovoltaic (PV) market since it was adopted in 2007.

INVESTORS CONCERNED

Investors and other solar energy market operators say the new plan has suffered delays because of the regional elections in Italy, due at the end of March, and that was preventing them from drafting their strategies for Italy’s booming solar market.

“We have made investment plans ... for the next few years hoping that there will be a new incentive plan and that it will be sustainable,” Gianni Chianetta, Chief Executive of BP Solar Italia, part of British oil major BP.

“But many of the planned initiatives in terms of investments and new job creation have been put on hold awaiting clarity. Further delays would create distrust in Italy and divert the group’s investments to other countries,” he said in a statement.

However, PV market operators were relieved that the government had softened cuts it planned to make to a key part of the incentive scheme in 2011.

“If the feed-in tariff is approved in a way we’ve learned from the media, we expect a stable and sustainable market under the new incentive scheme,” said Vincenzo Quintani, head of Suntech Italy, a unit of Suntech Power Holdings Co Ltd.

“2010 will be a peak year for Italy’s solar market,” Quintani told reporters on the sidelines of a solar energy conference in Milan.

Italy is Europe’s third-biggest photovoltaic market which uses PV panels to turn sunlight into power.

With an estimated PV capacity of above 900 megawatts at the end of 2009, Italy lags behind Germany with an estimated total capacity of between 8,508 MW and 9,108 MW and Spain with 3,283-3,323 MW, according to the European industry body EPIA.

Italy’s current support scheme is set to expire in 2010 when the capacity covered by the incentives hits a 1,200 MW cap.

Reporting by Svetlana Kovalyova and Stephen Jewkes

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