Italy With New Subsidy Scheme For Renewable Heating Systems

Market observers expect the new incentive mechanism for renewable heating systems and energy-efficient measures in Italy, to come into force at the beginning of January 2013. The three Ministries of Industry, Environment and Agriculture have only reached their agreement in November 2012. And the OK from the State-Regions Conference came in the middle of December. More than a year behind schedule, the implementation decree will soon be published in the Official Gazette. The decree introduces a subsidy scheme for renewable heating technologies pursuant to Article 28 of Legislative Decree 28/11, which requires the implementation of a feed-in tariff.

The total budget is EUR 900 million, of which EUR 200 million should be spent on public applications and EUR 700 million on private constructions by companies and individuals. The programme is independent of the public budget by receiving its money from a levy on the natural gas tariffs. Among the technologies eligible for this new scheme are also solar heating and cooling systems for hot water or space heating. Other technologies include heat pumps or biomass boilers. In public buildings, the programme will also subsidize thermal insulation, condensing boilers or shading systems.

The new subsidy is officially named Mechanism of Renewable Heating Systems and Energy Efficient Measures (small size), but the sector players have named it “Conto Energia Termico”, which basically means "Feed-in Tariff". Still, it is important to emphasise the fact that – at the moment – the subsidy scheme is not a real feed-in-tariff. This is common in the photovoltaics sector, in which subsidies are paid per metered energy output. During the one-year consultation process, the parties involved could not really agree on how to measure the solar yield. Instead, the now starting grant scheme will subsidize per square metre of collector area.

The particularity of the subsidy is its payment system, according to which subsidies are paid over two years for systems with a collector area below 50 m² and over five years for systems with a collector area above 50 m². Small hot water or space heating systems (below 50 m²) will receive 170 EUR/m²/year for 2 years. When combined with a solar cooling system, the square metre grant will be 255 EUR/m²/year for 2 years. Larger systems above 50 m2 will receive an annual 55 EUR/m² over 5 years. When combined with a solar cooling system, the area-specific amount will increase to an annual 83 EUR/m² over 5 years (for more information, please see the database of incentive programmes). The buyer of the solar thermal system – private, commercial or public – submits the application to Gestore dei Servizi Energetici (GSE).

A revision of the grant scheme is planned after two years into the programme. During this transition period, the ministries and GSE will work together to draft new rules and implement a real feed-in tariff. The key issues here are to develop guidelines for heat metering and to incorporate them into the decree during revision.

The incentives apply only to existing buildings. Applying the “renewable obligation” to new buildings would make a solar heating system eligible for incentives only above the size necessary to meet the obligation. The grants are exclusively allocated to projects which do not have access to other state incentives. They can be combined with nothing else than guarantee funds, revolving funds or interest subsidies.

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