Energetic Plans in Italy

'Microgeneration' Lets Consumers Save by Producing Power
By LIAM MOLONEY

ROME -- Italy's households and small companies are turning to mini-renewable power-generation projects to combat some of Europe's highest electricity tariffs.
Italy has lagged behind others, particularly Germany, in arranging financing for these projects. But the enthusiasm for harnessing environmentally friendly sources, such as the sun's rays, wind and water, to transform buildings into powerhouses by generating electricity could relieve pressure on Italy's energy infrastructure.
"I'd say about 20% of Italian buildings could be used for microgeneration," said Giovanni Battista Zorzoli of ISES Italia, a technical-scientific nonprofit association that organizes courses on renewable energy. "The incentives are such that families, thanks also to bank loans, can easily make such investments."
Microgeneration, or producing electricity on a small scale but from many outlets, might ease the need to build new large traditional power plants to meet growing demand. Soaring oil prices in recent years, which brought hefty energy bills, concerns over the security of energy supplies and increasing efforts to slash greenhouse-gas emissions, have turned renewable energy into a red-hot sector.
Promoting renewable energy is seen as necessary to trim greenhouse-gas emissions. The European Union wants 20% of energy to be generated from renewable sources by 2020; Italy's objective is 17%, a figure seen as challenging.
"The real potential of microgeneration is its capacity for being made up of thousands of small [renewable generation] facilities" as part of the effort to reduce emissions, said Edo Ronchi, head of renewable-energy foundation Sviluppo Sostenibile and a former Italian environment minister.
Observers also say microgeneration is important for Italy as a way to boost its energy security, since the country imports more than 80% of its energy supplies. Domestic oil and natural-gas reserves are dwindling, while plans to build power plants get bogged down in red tape and opposition from local communities.
The two key technologies are photovoltaic generation -- the use of rooftop solar panels -- and wind turbines. Currently it is the photovoltaic sector that is expected to attract the big bucks.
According to energy research body Institute Osservatorio sull'Industria delle Rinnovabili, "building-integrated" photovoltaic investments in Italian building could potentially amount to about €42 billion ($59 billion) in the 2009-2020 period. ISES Italia's Mr. Zorzoli estimates photovoltaic power could generate about 6% of Italy's electricity needs in 2020.
Most EU countries have an incentive-based system promoting photovoltaic power in dwellings and buildings used by small businesses. Sun-poor Germany leads the pack with about 5,000 megawatts of capacity versus Italy's 417 megawatts at the end of 2008.
In 2007, Miriam Di Palma, a married, working mother of two teenage girls who lives on the outskirts of Rome, installed five kilowatts of panels for about €37,000, including some roof work.
She sells the power generated in excess of her needs to the grid for a heavily subsidized price, while buying power back when she needs it by paying the lower market rate to her local utility.
The difference between what she earns and spends, averaged over the 20 years the incentive will last, makes for a sound investment. She calculates the investment will break even in five years, reaping profits after that. "I'm also happy I'm helping the environment," she said.
Such investments have what amounts to a state guarantee of a fixed return for a fixed period, a degree of security against which banks are very willing to make loans, experts said.
Key banks, such as Deutsche Bank AG, Intesa Sanpaolo SpA and Banca Monte dei Paschi di Siena SpA, are among those making loans.
Write to Liam Moloney at liam.moloney@dowjones.com