Cold Feet: Now Italy Cuts Solar Subsidies
Italian government imposes cuts of solar subsidies as part of measures aimed at reducing electricity bills for small and medium businesses.
Italian and foreign investors are challenging the legality of cuts in subsidies to the rapidly expanding solar power sector imposed by Matteo Renzi’s new government, which the industry warns will undermine Italy’s credibility in attracting fresh investments.
A government decree would cut some solar power tariff incentives by 10 to 25 per cent in the second biggest photovoltaic market in Europe. The move follows similar cuts in Spain and Greece.
The decree, which has not yet been signed by President Giorgio Napolitano, has been criticised as unconstitutional by Assorinnovabili, an association of renewable energy companies. It has commissioned Valerio Onida, former head of the constitutional court, to present a legal opinion to the head of state.
Parliament’s approval is also required to convert the decree into law within two months of the signing.
“These measures would lead to the failure of a majority of the entrepreneurial initiatives of recent years,” Assorinnovabili said, warning that 10,000 jobs would be at risk.
“Needless to say this step will strongly undermine Italy’s credibility to continue to attract foreign capital for future investments,” said Federico Giannandrea, head of operations in Italy for Foresight, a UK infrastructure and private equity manager.
“We are still evaluating the final impact of the proposed cuts on our own projects. We anticipate serious consequences.”
Mr Renzi’s coalition government imposed the cuts as part of measures aimed at reducing electricity bills for small and medium businesses by a total of some €800m a year, one of the pledges made by the prime minister after taking office in February but since watered down.