10 priorities for the development of PV

NOTE TO MINISTER PICHETTO FRATIN ON PRIORITIES FOR PHOTOVOLTAIC DEVELOPMENT

ITALIA SOLARE’s Proposals

ITALIA SOLARE is the only Italian association dedicated solely to photovoltaics, the technology that will cover more than 60 % of Italy’s electricity demand by 2050.
ITALIA SOLARE has 1,177 members (as of June 2023), accounting for 16,600 employees and 26 billion revenue (year 2022).

PV has the technical and economic potential to contribute substantially to the supply of energy at stable and low costs, improve energy security, reduce pollutant and greenhouse gas emissions, and create thousands of jobs.
In this note, ITALIA SOLARE presents proposals with reference to 2030 targets, with a view also to longer-term goals.

SUITABLE AREAS

We believe that the rapid conclusion of the process of identifying suitable areas is essential not only to ensure an orderly deployment of PV, but also for a more efficient development of storage systems and grid infrastructure.

We hope that the speedy issuance of the decree, announced by the Minister, will be followed by a speedy approval of regional laws, with prior coordination by the Ministry, so that the summation of suitable areas identified by the regions will be in line with targets.
We request that the suitability of areas already classified as such by state laws be safeguarded.
It should be clarified that all installations in agricultural areas classified as suitable areas are entitled to access to all support mechanisms, regardless of the type of construction (ground-mounted modules, agrivoltaic, "innovative" agrivoltaic”).
Classify agricultural areas that have not been used for a given number of years as suitable.

EXTRAORDINARY PLAN FOR THE FULL UTILIZATION OF PHOTOVOLTAIC PRODUCIBILITY

Without development of storage and grid infrastructure, there is a risk that the efforts made will be in vain, severely slowing the deployment of PV systems because they would be underutilized. A speedy implementation of ARERA’s regulations (Regulatory Authority for Energy, Networks and Environment) on centralized storage is good, but we ask to monitor it to avoid the risk of excessive concentration of storage control.

The FER3 decree should support, by means of dedicated quotas, storage integrated with photovoltaic systems.
In suitable areas, the creation of centralized storage by renewable power generators should be encouraged, to maximize "time shift" service, with fast lanes for grid connection.
Support the setting up of companies in areas with a high density of installations and suitable areas, with a view to the hoped-for and rapid replacement of the National Single Price by a zonal price.

ELECTRICITY MARKET

Current electricity market rules are holding back photovoltaic development, particularly in the South, an area with higher solar and wind energy potential. Due to insufficient grid and storage infrastructure, zonal energy prices are often very low or equal to zero. This discourages PV investors and does not benefit local consumers. This problem, combined with the lack of access to support mechanisms for plants located in agricultural areas, results in the risk that several thousands of MW of already authorized plants will not be built. Therefore, 2030 targets would be unattainable.

There is a need to overcome the Single National Price in order to transfer the benefits of lower and more stable prices to consumers in areas with a high concentration of PV plants, without prejudice to the need to develop storage systems and grid infrastructure, to prevent prices from falling to levels incompatible with investment in new plants.
The new Integrated National Energy and Climate Plan should provide for the possibility of switching to self-dispatching of electricity, to simplify the use of long-term contracts between generators and consumers and to accelerate the use of all flexibility opportunities, including demand response.

PV IN AGRICULTURAL AREAS AND AGRIVOLTAICS

This is a topic that intertwines with several issues, some of which have already been mentioned with regard to suitable areas and the power market. Access to incentives is currently banned for PV in agricultural areas with ground-mounted modules (including contracts for difference). This ban does not apply to “elevated” agrivoltaic systems, i.e. with modules at a minimum height from the ground of 2.1 m in areas intended for cultivation and 1.3 m in areas intended for livestock farming, as provided for by the Ministry of Environment and Energy Security’s Guidelines, which have become the permitting standard also for regions. In the meantime, thousands of MW of PV systems with ground-mounted modules placed in agricultural areas are being authorized (and partly built), under the assumption that the sale of power to the market is sufficient for a return on investment. As mentioned above, this assumption may be contradicted by the lack of infrastructure and by current market rules. Therefore, there is a possibility that only innovative agrivoltaic plants will be built in agricultural areas, to the extent that generous incentives are available to cover the higher costs: these incentives are currently those provided by the NRRP; in the future, national resources should be added, possibly burdening electricity bills. Besides, plants with such “minimum” heights would have a serious impact on the landscape, with the risk of being rejected by local communities.

It should be clarified that all PV systems in suitable areas are eligible for incentives, including those with modules on the ground.
The Ministry of Environment and Energy Security’s Guidelines on agrivoltaics should be updated to overcome the minimum height requirement of 2.1 m and 1.3 m mentioned above, allowing for derogations where it can be demonstrated that agricultural activities can coexist with PV systems even at lower heights.
The possibility of an exemption to the ban on access to contracts for difference for the thousands of MW of installations with ground-mounted modules in agricultural areas that have already been authorized should be taken into consideration, including with additional dedicated quotas, in order to prevent projects from being abandoned, thus jeopardising the achievement of 2030 targets.

CONNECTION TO THE POWER GRID

We point out two main problems: 1) excessively long connection times, which are incompatible with the achievement of the targets; and 2) the so-called virtual grid saturation, caused by PV and wind power grid connection applications currently equal to at least 4 times the new renewable power to be implemented by 2030, as indicated by the Ministry in the executive summary of the new Integrated National Energy and Climate Plan. This causes confusion regarding grid developments and unsustainable pressure on national and regional offices in charge of environmental assessments and permitting.

The adoption by ARERA of dedicated connection rules for PV should be promoted, since about 99.5% of new connections carried out each year involve PV systems, particularly small ones. For these systems, the cases in which the connection of the system is possible just by notifying the grid operator and the conditions under which such connection can be made by qualified installers should be established.
It is necessary to monitor the behaviour of grid operators, sometimes dilatory, sometimes tending to complex, expensive solutions with unpredictable implementation times.
Once suitable areas have been identified, priority should be given, among all installations that have applied for connection, with regard to both connection and permitting procedures, to installations located in suitable areas; similar connection priority should be given to self-consumption installations and to those which do not require a building permit.

COMPLETE THE FRAMEWORK OF SUPPORT MECHANISMS

PV as a generation technology does not require big incentives, but revenue stability, ensured by contracts for difference, for example.

Support measures, on the other hand, are needed for grid and storage infrastructure, as mentioned above. Likewise, support may be needed for particular categories of PV users or consumers and for some significant applications, to encourage them to face the investment cost, which is the main cost item of PV power.

We hope that the so-called FER3 decree, a ministerial decree to provide incentives to small and large installations with the mechanism of contracts for difference, upon public consultation, will be issued soon, to avoid the mistakes of FER1, providing for dedicated quotas for installations on agricultural land (including agrivoltaics), PV installations with combined storage systems, and PV installations on canopies and parking lots.
We are confident that the REC decree and GSE's implementation rules will be published soon and that they will be simple and inspired by an approach aimed at maximum participation, simplicity and flexibility, which are key requirements given that RECs include citizens, local authorities, small and medium-sized enterprises. In the implementation decree and in GSE's technical rules we trust that some elements that have been critical to date will find a solution (including participation of condominia, commercial operation of plants above 20 kWp, beneficiaries of NRRP contributions).
We request the enhancement of tax deductions for installations up to 20 kW serving household consumers: we propose to increase the tax deduction from 50 to 65% for installations equipped with storage systems, to be spread over five or ten years at the taxpayer's choice, and to extend this option to non-household consumers as well.
For installations of more than 20 kW serving business users: without prejudice to the option of access to energy tariffs, it is necessary to address the difficulties faced by companies in financing the installation of systems due to limits to access credit facilities. We propose to set up a guarantee fund in favour of banks that finance businesses’ installations, so that their line of credit is not affected. If such installations are placed on buildings and sheds for which roof reconstruction is essential in order to place PV modules, it would also be appropriate to grant a suitable tax deduction.

COMPLETE THE SIMPLIFICATION OF PERMITTING PROCESSES

Many different simplifications of permitting procedures have been introduced in recent years, unfortunately with different rules, derogations, exceptions… and in any case, in our opinion, without a consistent plan. The recent document issued by the Chamber’s Study Service testifies to the confused and fragmented picture that emerges from this approach. We believe that priority should be given to the definition of a consistent and homogeneous framework for permitting, environmental and landscape procedures. We therefore hope that the legislative decree provided for in Article 26 of the Competition Law of 2022 will be finalized soon.

OBLIGATION TO INSTALL PV

Strengthen the existing obligation of PV systems on new buildings or buildings undergoing major renovation, and consider the possibility of gradually introducing an obligation, including incentivized, to install PV systems on the roofs of existing buildings, or to make these roofs available to third parties.

NATIONAL SUPPLY CHAINS

Promote the development of national production chains for PV system components.

TRAINING

Start training programs for PV technicians.