Italy Learning From the Spanish Photovoltaic Debacle

March 29, 2010
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Analysis by: Mark Burger
Analysis of: Italy will unveil new solar incentives plan in April
Published at: www.pv-tech.org
Summary
Italy is expected to be the number two photovoltaic market behind Germany. This was last held by Spain which, briefly, had the largest market for one year before collapsing from an excess of incentives and no cap to the opposite extreme. Italy looks like they are learning from Spain's excesses.
Analysis
Despite continued growth, sooner or later the German photovoltaic market, still Europe's and the world's largest, will level off. By all logic, the number 1 and 2 markets should eventually be the US and China due to size, sunlight and population. Until that happy time, other national markets, like South Korea, a resurgent Japan and Italy, may assume prominence. Italy would be a natural for the PV market, with abundant sunshine and high electricity prices. Growth of the market indicates that it should be the number 2 European market behind Germany.But there are question marks around this promise. The financial cloud over the Euro and much of the European economy remains. The administrative process for Italian PV installations resembled too closely the problematic Spanish market, as well as much of the Mediterranean. More importantly, will Italy repeat Spain's boom and bust disaster of a too high incentive and no cap, then panic to too low a cap as well as incentive reduction, strangling the market in its crib? In this regards, Italy appears to have learned from the Spanish market collapse and is re-calibrating its feed in tariffs to reduce excess and adjust to downward prices in the photovoltaic industry. The new plan should be out shortly. The issue of a cap, even at 1,000 MW per year, may be more of an issue, as opposed to letting the FIT's decline to reflect market interest. Another contention is potential tension between megawatt-scale sized projects and smaller ones favored by local farmers. But the results should be a more sustainable market than what Spain was, and is.