Rapid growth of PV installations in Italy in 2011

According to IHS iSuppli, with the global investment in Italy, the Italian solar market was highly active in the fourth quarter of 2010, laying the foundation for the doubling of photovoltaic (PV) installations in 2011.

According to interviews with major project developers and energy performance contractors in Italy, the country will install 975MW of PV solar system in the fourth quarter of 2010, which is twice the 487MW in the third quarter and 239MW higher than the 288MW in the fourth quarter of 2009. %.

The rapid growth in the fourth quarter will increase the installed capacity in 2010 to 1.9 GW, which is an increase of 100% from 720 GW in 2009. At the same time, this will also lay the foundation for the market to double again to 3.9 GW in 2011.

The figure shows the forecast of the installation of the Italian PV solar system in 2009-2010 by IHS iSuppli.

The fourth quarter marked a breakthrough in PV installations in Italy. Before that, the installed capacity in each quarter was less than 300MW. A subsidy policy of the Italian government is about to expire, prompting installers to step up their installations, thereby stimulating strong growth in the fourth quarter.

A system that is installed before the end of the year and is connected to the power grid by June 30, 2011 will still be able to enjoy the 2010 Internet Subsidy Price (FIT) of Second Conto d'energia in Italy.

According to the current FIT, if the price of the installed system is every 2500-2800 euros per kWp, it can be very attractive to have an internal rate of return (IRR) of 15-18% in Italy. Due to limitations in France, the Czech Republic, and Spain, or substantial reductions in solar FIT, Italy's IRR is very attractive to investors. Therefore, investors are flocking to Italy, leaving the Czech market that is closing, and even the relatively safe German market.

Indeed, after the sharp increase at the end of 2010, Italian solar installations will decline at the beginning of the first quarter of 2011. However, this situation is expected to last only a few weeks, not months, after which the installation activity will increase rapidly again. Although the FIT is expected to be lowered, the IRR of Italian solar investment will still be higher than anywhere else. Therefore, the number of Italian installations in each quarter of 2011 will increase to around 1 GW.

However, there are some indications that there may be some difficulties in the future.

For example, one potential risk to the optimistic market outlook is that the Italian government may lower the FIT earlier than expected. However, the authorities are unlikely to adjust the FIT before the third quarter of 2011. In addition, the official data of the state-owned power management agency GSE may be delayed by about six months, leading to a formal assessment delay. Only after the official assessment can the FIT be adjusted.

Local governments may also limit the amount of land used for solar power generation, although such restrictions must comply with Italian federal law.

Finally, the grid connection in southern Italy will be more difficult than elsewhere, causing additional problems.

In any case, if PV installation data can grow at such a good rate in the fourth quarter of 2010, it is entirely possible for project developers to overcome any difficulties in 2011.