Insights: PV and storage market drivers in Italy
Last year, PV plants totaling 409.40 MW (+37% 2016) were installed in Italy. With this addition, the Italian cumulative photovoltaic capacity reached 19.69 GW by December 31, 2017. This amount was reached by 43,913 new pv-installations, of which 38.946 remained below 10kW while 4.967 equaled or exceeded 10kW.
Regarding pv-systems for commercial and industrial companies (C&I) in Italy, 175 PV systems were installed in the 100 to 200 kW range, 113 in the 200 to 500 kW range, 11 in the 500 kW to 1 MW range and only 7 installations above 1 MW. The most significant larger installation comprises 63MW, which are divided into 5 photovoltaic plants. This project has been realized on grid parity basis and without any subsidies or incentives.
In detail, this grid-connected utility scale plant can be competitive by selling wholesale energy at a fixed price. That takes place through a two-year contract stipulated with the investment fund that has also realized construction of the plant.
Secondary market: up to 100 MW revamping projects
For the secondary market in Italy in 2018, we estimate revamping projects in a range of 90-100 MW. It is interesting to note that around 25,000 pv power plants above 5 MW, equaling 8% of total installations, have already been under maintenance and modernization projects before the end of October 2017. Moreover, 70% of the plants for which maintenance and modernization measures have been communicated, have been under operation for more than 6 years.
The performance ratio of the plants in operation seems to be around 75%. That is due to the fact that around 50% of the Italian solar parks have been realized with low-cost components. This approach now seems to come back to park owners like a boomerang, causing trouble with malfunctions like hot spots, potential induced degradation (PID), silicon breakage, delamination, junction box malfunctions and others. Around 55MW of modules from a total of of 485MW of incentivized pv-plants have been replaced.
A strong driver of the 2018 market remain to be the residential tax deductions of 50%. At the same time, C&I projects will be driven mainly by the super amortization and a tax exemption passed this year to 130%, which will allow a further increase in productive investments.
Asbestos disposal bonus
Another driver is the asbestos disposal bonus 2018, which consists of a 50% tax credit for companies carrying out asbestos removal and eternit disposal.
It must be divided into 3 annual quotas, in favor of entrepreneurs who carry out asbestos reclamation operations on assets and production facilities. The amount must not be less than 20,000 Euro and not exceed 400,000 Euro.
Expected 500 MW new installed PV capacity in 2018
If EnergyTrend predicts that 106 GW of new solar power will be installed globally in 2018, the contribution of Italy will remain well below 1 GW. We estimate to reach the fateful 500 MW thanks to the FER decree in discussion that will favor the return to investment in utility scales, an estimated market of about 200 MW per year.
Recall that in recent days the European Commission has approved the capacity market in Italy, or the remuneration mechanism of flexible electric power, related to the entire market, to ensure the security of electricity supply in Italy.
The provision will remain in force for ten years, during which Italy will implement market reforms, aimed at remedying the structural risks that characterize the supply.
As part of the measures, suppliers can obtain financial compensation in exchange for available capacity to produce electricity or, in the case of demand management operators, availability to reduce electricity consumption.
Diffusion of PERC technology
The high efficiency standards introduced in Italy for this year see a diffusion of PERC technology especially in monocrystalline photovoltaic modules with the half-cell technology at 5 and 6 bus bars, therefore high specific powers but always with a focus on reliability and durability.
The monocrystalline technology increases its market share especially in the residential segment to the detriment of polycrystalline modules. These however, remain to be seen as a first price choice by pv-operators, especially for the construction of industrial plants.
The half-yearly prices will follow the trend of the MIP, which will allow an increase in demand in the second half of the year, especially for industrial plants.
Energy storage market - innovative three-phase solutions ahead
The growth of the storage market (ESS) continues at a progressive and stable rate, estimated at 7-8,000 new installations of which about 90% will be represented by all-in-one and modular single-phase solutions used for residual installations up to 6kW.
On the three-phase front the road is going uphill with innovative solutions that we will see in the next few months. The development will certainly depend on the price that, compared to 2017, will see a decrease of 10-12% thanks to the reduction of Lithium costs.
The decarbonisation of the Italian energy system continues to grow, it will be interesting to see with what kind of tools and how long it will ta(ke to achieve the objectives approved by the EU: 35% of renewable energy supply by 2030. (AN/HCN)
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