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Italian Solar Subsidies May Be Slashed For Good

In the drive to increase solar power generation in Europe, Italy has trailed only Germany in subsidies and installed megawatts. Germany has lowered its subsidies for solar installations, though not as severely as feared just a few months ago. Italy, however, is now considering a plan that is much worse for solar makers than first thought. If the new law is enacted, the pressure on solar makers’ shares will increase almost instantly…

If Italy goes ahead with its proposed changes, which are scheduled for a vote on Thursday, March 3rd, every company could see a bit of a slowdown. Under the Italian proposal, a cap on the amount of solar generation would be set at 8,000 megawatts. Once that total is reached, feed-in tariffs for new plants would be suspended.

The total installed solar capacity in Italy is officially pegged at 3,700 megawatts, but there are estimates that the actual amount installed is approaching 7,000 megawatts. The government is approving projects at the rate of about 1,000 megawatts a month, which means that the 8,000-megawatt limit would be reached in July or August.

The proposed law also imposes a cap of 100 kilowatts of installed ground-mounted panels per hectare of farmland (a hectare is about 2.5 acres), and limits an individual project on agricultural land to 1 megawatt of capacity.

In all, the proposed strictures are significantly more severe than anticipated, and the new law would go into effect immediately upon passage and there is no allowance for grandfathering existing projects

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