Sunny with a Chance of Gigawatts

The recently posted 2010 predictions for solar market was a stimulus for reflections on local business opportunities. Being Italian, it comes natural to contribute to this blog with a discussion about the solar photovoltaic (PV) market in Italy and the innovation potential.

Italy's goal is to have 3 gigawatts (GW) of PV by 2016. Today, Italy has 0.3 - 0.6 GW of solar PV installed (although statistics on installed capacity vary widely). According to Enel SpA, the cumulative PV capacity in Italy is 0.4 gigawatts peak (GWp), split 17% ground-connected (grid), 60% commercial rooftop and 23% residential rooftop.

Financial analysts see the market growing to 0.6 - 1 GW in 2010. If the 1 GW in 2010 scenario comes true, then Italy will need to grow the PV installed capacity by 20% a year to reach the 2016 goal. GIFI Italia (Gruppo Imprese Fotovoltaiche Italiane) expects 1.3 GWp installed during 2016 alone for an overall cumulative capacity of 7.2 GWp. Is this growth feasible operationally, technologically or financially?

Operationally, the 2016 3 GW goal translates to around 6% of Italy's energy mix, assuming Enel SpA increases its 2008 40.3 GW net efficient capacity by a modest 3% annually. Enel SpA appears to be one of the best equipped utilities in the world to integrate 6% of PV into its grid, having installed their Digital Meter with over 30 million electricity customers. The digital meters may reduce overall electricity consumption by changing consumer behavior or flatten the peak by automatically shutting off energy-hungry devices during peak hours. Also, at the end of 2009 Italy had installed and connected 4.8 GW of wind energy, which is much more difficult to integrate into the grid than PV energy. The grid integration of future PV energy will be similar to other European countries such as Spain, which has 19 GW of wind and more than 3 GW of PV connected to the grid.

Technologically, to reach its 2016 goal Italy would require about 40 large-scale solar plants of 50 megawatts (MW) each near densely population hubs. Spain and Germany have demonstrated the feasibility of such projects with the Olmedilla, Strasskirchen, Lieberose, and Puertollano parks. So it's something which can be done, even if it requires investments not always easy in economically harsh times. Same overall capacity of about 2 GW distributed over small rooftop scale systems (1 – 6 kW) means about 0.3 to 1.3 million roof tops - quite a lot but in principle not out of reach for a country with less than 60 million people. Of course, the average scale plants to be realized on top of commercial or industrial areas could go a long way to meeting the goal.

Financially, Italy's feed-in tariff (FiT) incentives, first endorsed in 2005, favor PV installations. Ground installations, "not integrated" with buildings, have been least favored historically by the FiT scheme. But, the largest PV project currently installed in Italy is 6 MW in Montalto di Castro. The elimination of the maximum cap of 1 MW for a single PV plant in the 2007 Ministerial Decree was a positive policy development towards embracing PV at scale. Although, the future of Italy’s feed in tariff is not entirely clear at present, as Reuters recently reported a proposed delay in Italy's new solar plan.

What's important to remember about Italy is that it was one of the PV leaders in the 1990s. In the mid-1980s, the Italian company Baccini introduced the solar industry's first integrated cell metallization line for PV manufacturing. In 2009, the team launched the Esatto technology, keeping Gisulfo Baccini's innovation spirit alive. Fans of more PV in Italy, from the government, cities or industries, are welcome to visit our Baccini facilities in Treviso, near Venice.

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