Cut of incentives on PV in Italy, for around 18%

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by Felice Lucia

On 25.06.2014, the so-called "spalmaincentivi" decree (DECREE-LAW June 24, 2014, n. 91) entered into force. It must now be approved by Parliament. 

In Article 26, the decree proposes, for plants above 200 kW, the reformulation of the incentive fee based on the percentage of reduction indicated in the table below. This is paid for a period of 24 years from the entry into operation of the plants.

Table

For a system with a remaining lifetime of 18 years, the rate is reduced by 18%, but the incentives will be granted for 24 years. For example, suppose you have incentives for € 100'000 per year, this will rise to about 82'000 euro per year, spread over a period of 24 years and no more over 20. Out of 18 years, about 18'000 euro X 18 = € 324'000 will be lost, whileyou will have about 82'000 euro X 4 = 328'000 euro more than the previous twenty years-rate, thanks to an additional four years. 

The balance is apparently the same. In fact, there is a substantial difference in the annual cash flows. 

Alternatively, you can choose a reduction of 8 per cent of the recognized incentive for the remaining term of the incentive period.

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