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Planet Ark World Environment News Solar Industry Sees Boom in Sunny Italy

Date: 17-Sep-07
Country: ITALY
Author: Svetlana Kovalyova

Italy is trying to catch up in a worldwide race to find
alternatives to the fossil fuels that arouse worries about
security of supply and planet-warming carbon emissions.

Earlier this year, the Italian government approved new
incentives to boost photovoltaic (PV) energy, which turns
sunlight into power. It ordered all new buildings to have solar
panels on roofs, aiming to exploit fully its abundant sunshine
-- about 30 percent more per square metre than in Germany.

"Italy must be more aggressive," said Winfried Hoffmann,
president of the European Photovoltaic Industry Association
(EPIA). "We in Germany have installed 3,000 megawatt (MW) over
several years, and there is much more sunshine in Italy."

One megawatt (MW) -- a million watts -- is enough
electricity to power about 1,000 homes.

As a result of its new incentives, Italy aims to boost
installed photovoltaic capacity to 3,000 MW by 2016, nearly 60
times more than last year.

Uwe Krueger, chief executive of Swiss technology group
Oerlikon, said interest in solar power was rising as improved
technology and high oil prices meant it was closer to being able
to compete with traditional fossil fuels.

"It gets economically viable in areas of the world where
there is a lot of sunshine: southern parts of the United States,
areas in Asia, the Middle East, Italy, Spain, Greece," he said.

"No wonder we experience a lot of demand coming specifically
from these areas. We are talking about billions and billions of
dollars of investment which are lined up there for solar parks."

Italian sector specialists expect costs of solar energy
generation to become competitive with traditional generation in
Italy in the next 10-15 years.

German solar company Conergy, which aims to expand in Italy,
expects this goal to be reached within the next 10 years, the
same timeframe as in Germany.

Southern Italy is where it will happen quickest, with solar
power output nearly double that of further north -- at 1,500
kilowatt hours per year per every KW of installed capacity
versus 900 KW hours a year.

INCENTIVES

To lure investors, Italy in February amended its solar
energy law to align it with a German incentive scheme called
"feed-in tariff", which guarantees above-market prices for
generating solar power.

"Without subsidies, solar is nowhere near conventional
utility energy rates," said analyst Paula Mints of Navigant
Consulting.

Under the revised Italian law, PV system operators would get
up to 0.49 euro per KW hour of produced power for 20 years.
That means operators and individuals can repay investments
within 8 to 12 years -- faster than the 12 to 16 years in
Germany -- and get attractive earnings over the entire
operations period, Conergy said.

Experts expect Italian households to buy into the idea of
cutting their electricity bills, among the highest in Europe,
and even profit from putting solar modules on the roofs. Some
companies offer elegant roof tiles with built-in solar panels.

"If investors get returns comparable to other large
infrastructure projects, you will see a very serious growth,"
said Conergy board member Christian Langen.

Italy's biggest power utility Enel said last month it would
invest 300 million euros (US$417 million) over three years to
build solar power installations with a total capacity of over 35
MW.

Some other experts, like Oerlikon Solar CEO Jeannine
Sargent, think the cost gap could close in Italy faster and
ahead of other countries that are less dependent on costly
imports of fossil fuels. Italy imports 80-90 percent of its oil
and gas.

FIGHTING RED TAPE

The amended Italian law also scraps limits on annual
incentives to install PV modules and it boosts subsidies for
households to put solar panels on roofs and save energy.

Market participants at a PV energy conferen

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