The final draft of the fifth Italian Feed-In Tariff (FiT) system for photovoltaic (PV) plants (the Conto Energia V) was signed on 6 July 2012 by the relevant ministers. It will enter into force after its publication in the Italian Official Gazette, which is expected to happen in the next few days.
Under the new Conto Energia V, in order to be eligible for the FiT, ordinary PV projects must be registered with the Gestore dei Servizi Energetici (GSE) and ranked according to certain priority criteria in order to fall within the following budgets:
- First registration period: €140 million
- Second registration period: €120 million
- All subsequent registration periods: €80 million
Separate budgets of €50 million each are reserved to building-integrated PV plants with innovative features, concentrated PV plants and PV plants built by the Public Administration. Rooftop PV plants of up to 50 kWp installed in combination with the removal of asbestos and small PV plants of up to 12 kWp generally do not fall under any budget restrictions.
The Conto Energia V will expire once the overall annual expense cap of €6.7 billion for incentive payments payable to PV installations in Italy has been reached.
We will analyse the new FiT system in detail after the publication of the final version of the Conto Energia V in the Official Gazette. In the meantime, however, it is worth looking at its potential impact on projects currently under development or construction.
The new FiT system will apply 45 days after the publication by the Italian Authority for Energy and Gas (AEEG) of the notice that the annual aggregate value of FiT payments for PV plants in Italy has reached the €6 billion threshold. PV plants that start operations on or before 31 December 2012 will fall under the new FiT unless they are installed on property belonging to the Public Administration, in which case they will continue to be eligible for the FiT under the Conto Energia IV.
All previous drafts of the Conto Energia V contained a transitional rule, pursuant to which the FiT of the Conto Energia IV continued to apply to all PV plants that start operations prior to the application of the Conto Energia V FiT system. The final version of the Conto Energia V, however, includes a dramatic exclusion to this rule. Large PV plants that have not obtained a ranking position in the GSE register for 2012, and are not built on Public Administration property, will no longer be eligible for the 2013 FiT provided by the Conto Energia IV, even if they start operating prior to the application of the new FiT system under the Conto Energia V. The only form of protection that the Conto Energia V reserves to these plants is a special priority right in the ranking of the first GSE registration period under the Conto Energia V.
The unexpected exclusion from the tariff protection rules of large PV plants on private land and without a GSE ranking position in the 2012 register will cause massive damage to developers, contractors and investors. It is highly likely that the ultimate decision on the legitimacy of this exclusion will be referred to the courts.© 2013 McDermott Will & Emery