Law Decree No. 91/2014: "Spalma incentivi"

On June 25, 2014 the Decree Law 91/2014 called "spalma-incentivi" (hereafter the "Decree") was published in the Official Journal.

Below there is a brief overview of the main changes introduced by the Decree.

Article 23 of the Decree identifies beneficiaries of the measures introduced, providing for a redistribution of the tariff charges to the benefit of users of medium and low voltage with more than 16.5 kW, excluding residential and public lighting. The current structure states that consumers connected to simple systems of production and consumption are exempt from the payment of the costs of the system for the self-produced energy.

Article 24 of the Decree provides that the aforementioned consumers must contribute to the general system charges in an amount equal to 5% of the corresponding amounts payable on energy drawn from the grid.

Article 26 also provides for a reorganization of incentives for PV installations above 200 kW. From January 1, 2015 the rates will be rescheduled, 24 years instead of 20 and the percentage of reduction shall be as defined in the following table.

To ensure the financial sustainability of operations, operators will have access to bank loans for a maximum amount equal to the difference between the incentive payable at January 1, 2015, and the incentive rescheduled, "on the basis of special agreements with the banking system, funding dedicated or guarantee granted by Cassa Depositi e Prestiti". Regions and local authorities need to adapt to the duration of the rescheduled incentives the validity of the permits issued for the construction and operation of photovoltaic plants (Article 25, paragraph 6).

If the producer does not want to extend the period of payment of the incentive, he will suffer a reduction of 8% of the incentive for the remaining term of the incentive period. The option may be exercised until 30 November 2014 and the reduction would start from January 1, 2015.

In addition, the second paragraph of Article 26 provides that as from the second half of 2014, GSE will pay the incentive rates with monthly installments equal to 90% of the average level of production, then make an adjustment by June 30 of the next year.