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Italian Senate Approves Draft Revision of Restrictions to PV Plants on Agricultural Ground

by Carsten Steinhauer

On March 1, 2012, the Italian Senate approved the draft text which will transpose into law Decree no. 1/2012, the Liberalisation Decree.  The draft text still needs to be approved by the Italian Chamber of Deputies. The approval must be granted by March 24, 2012 at the latest. Once the text is approved, it will then be published in the Official Gazette before entering into force. If not approved by March 24, 2012, the Liberalisation Decree will lose its efficacy as of the date of its publication (January 24, 2012).

The draft text provides a number of modifications to the original version of Article 65 of the Liberalisation Decree, which initially introduced the ending of the feed-in tariff (FIT) for newly-installed ground-mounted photovoltaic (PV) plants on agricultural land.

Although the ending of the FIT for ground-mounted PV plants on agricultural land has been confirmed, two categories of PV plants will continue to be able to avail of the FIT:

  • PV plants located in areas owned or leased by the Italian military; and
  • PV plants that were authorized previously, and will commence operations within 180 days of the entry into force of the amended Decree being transposed into law.

However, these two categories of plants remain subject to the restrictions that were introduced by the Renewables Decree, dated March 28, 2011, namely that PV plants located on agricultural land must not exceed 1 megawatt (MW), nor cover more than 10 percent of the available land, and must be at least 2 kilometers (km) from PV plants located on land belonging to the same owner.  It is not entirely clear if the restrictions will apply to both types of PV plants benefitting from the exemption: if interpreting the provision literally, the restrictions should apply in both cases. However, it would appear that the legislatures’ intention was different. In both circumstances, the restrictions do not apply if the land has been abandoned for at least five years.  

As expected, the retrospective cut of the FIT for previously-authorized PV plants benefiting from a safe harbor provision under the Renewables Decree has been abolished.  Instead, the safe harbor has been extended by a further 60 days to compensate for the uncertainty during the period between the enactment of the Liberalisation Decree and the amended text coming into force. However, the revised text also abolishes the increase of the FIT for PV plants located on greenhouses, as introduced by the Liberalisation Decree.

In summary, by applying Article 65 of the Liberalisation Decree, as amended, ground-mounted PV plants located on agricultural land will be entitled to the FIT as outlined below.

Entitlement to FIT for Ground-Mounted PV Plants on Agricultural Land

Agricultural land belonging to the Italian military

Any other agricultural land

Irrespective of date of authorization or grid connection

Authorization before the entry into force of [...]

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Italian Government Stops Incentives for Ground-Mounted PV plants on Agricultural Lands

by Carsten Steinhauer

As part of the liberalisation package adopted on 20 January 2012, the Italian Government has decided to stop incentives for ground-mounted photovoltaic (PV) plants on agricultural land.

The previous Government had already introduced limitations to photovoltaic plants located on agricultural land by limiting the incentives to only those not exceeding 1 MWp and on the condition that they did not cover more than 10 per cent of the available land. An exception was made where the land had been abandoned for at least five years. These limitations were set out in paragraphs four, five and six of Article 10 of legislative decree no. 28 of 3 March 2011 (the Renewables Decree), which have now been abolished.

The current Government has now decided to eliminate incentives for all ground-mounted photovoltaic plants on agricultural land. Article 65 of the Liberalisation-Decree (the Decree) provides that the new rules will apply to all new installations, except those for which the request for authorisation was filed before the entry into force of the Decree and provided that operations start within one year from the entry into force of the Decree. The PV plants that do not fall under the application of Article 65 shall, in any case, comply with the limitations under paragraphs four, five and six of Article 10 of legislative decree no. 28 of 3 March 2011.

In turn, the Government has increased incentives for photovoltaic plants installed in greenhouses, by providing that they will receive the full tariff for rooftop PV plants instead of the currently applicable rate, an amount between the tariffs awarded for rooftop and the tariffs for ground-mounted facilities.

The Decree has now entered into force following its publication in the Official Gazette. Parliament has 60 days, as of the publication, to approve and convert the Decree into law. During such period, Parliament may introduce further amendments. It remains to be seen whether Parliament will approve the increase of the incentives for greenhouse PV plants.

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