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SunPower says Italy plans on track despite cap

VALENCIA, Spain (Reuters) - SunPower Corp.. is on track to double its solar power installations next year in Italy despite regulators’ plans to cap the number of plants entitled to subsidies, a senior executive for the U.S. solar panel maker said on Wednesday.

Executive Vice President Julie Blunden said in an interview SunPower had more than 200 megawatts of plants under construction and due to come on line in 2011 in Italy, Europe’s third-biggest solar market, compared to 108 MW this year.

“We’ve planned our power plants to be constructed well within the margin of error for the Italian feed in tariff design,” Blunden said on the sidelines of a solar power conference in Valencia, Spain.

“I think the Italian regulators have done a nice job of providing signals and previews to people of what to expect from the market.”

Italy will cut so-called feed in tariffs for solar power by about 30 percent in 2011 and set a limit of 3,000 MW on new conventional photovoltaic (PV) capacity entitled to incentives over the next three years.

Most solar power plants currently use PV panels, which directly convert sunlight into electricity.

Solar power could provide 22 percent of the world’s electricity by 2050, according to the International Energy Agency, but is still in its infancy and depends on subsidies.

Solar has boomed in recent years in Europe as governments have invested billions of euros in cutting their greenhouse gas emissions and dependence on imported fuel, but are scaling back on subsidies as austerity programmes bite.

SPAIN, GERMANY

Spain slashed solar subsidies in 2008 which had made it the world’s second-biggest producer, and Blunden said regulators had since then tried to shift the market away from ground-based plants.

“In Italy I think the policy makers understood what solar could do on roofs,” she said. “In Spain, one of the problems was that the government anticipated trying to develop a rooftop market, and it’s not what they got.”

Since then two-thirds of the 500 MW plants entitled to subsidies in Spain have been roof-mounted, and the government plans to cut subsidies by a further 45 percent next year.

SunPower has built some 200 MW of solar plants in Spain, has 9 MW under construction and a market share of about 10 percent.

Germany is also planning to cut subsidies, but Blunden said she did not foresee a supply glut in solar panels in 2011 due to lower incentives in the world’s top solar producer.

“The German government has made its decision that it will look to reduce feed in tariffs rather than implement a cap at the beginning of next year, which will allow the market to proceed without a surge, which is likely to create a steadier business,” she said.

“With that decision, I think we are likely to see continued growth into 2011.”

Editing by James Jukwey

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