Premium

Italy’s solar renaissance: the challenges, the opportunities and the grid

Facebook
Twitter
LinkedIn
Reddit
Email
Italy currently has 140GW of solar PV projects in its grid connection queue. Image: Juwi

In 2023, Italy installed over 5GW of new solar PV generation capacity, by some distance the most since 2011. Of last year’s new capacity, a far larger share was taken up by large-scale projects; the national trade body, Italia Solare, recorded that in Q3 2023, the country added 341MW of solar in plants of 10MW or more, compared with 420MW from the same-sized facilities in the preceding two and a half years.

As Italy’s solar market looks to be finding its feet after a decade of stumbling around below the 1GW mark, 2024 could be the year it starts to cover real ground again. But hurdles still remain, from grid constraints to permitting issues, engineering, procurement and construction (EPC) bottlenecks and land constraints.

This article requires Premium SubscriptionBasic (FREE) Subscription

Unlock unlimited access for 12 whole months of distinctive global analysis

Photovoltaics International is now included.

  • Regular insight and analysis of the industry’s biggest developments
  • In-depth interviews with the industry’s leading figures
  • Unlimited digital access to the PV Tech Power journal catalogue
  • Unlimited digital access to the Photovoltaics International journal catalogue
  • Access to more than 1,000 technical papers
  • Discounts on Solar Media’s portfolio of events, in-person and virtual

Or continue reading this article for free

Grid congestion

PV Tech Premium recently spoke with Cristiano Spillati, Managing Director of Limes, a solar and renewable energy developer headquartered in Italy. Our conversation took place in a hotel lobby at the Large Scale Solar Europe 2024 conference in Lisbon last month. As was reflected in our coverage of the event at the time, grids were a recurring topic, particularly when conversation turned to Southern Europe.

Spillati said that around 140GW of solar PV projects are currently in the grid connection queue in Italy and that the total queue for all renewables is in excess of 300GW. This, he said, comes down to permitting: “There is no barrier to entry” for projects to get accepted for a connection point, as he claims it currently costs only around €3000.

He continued: “There are many individuals or companies who do only the first two steps; they sign [for] a piece of land, they get the connection point and, even without accepting it…you have the idea of a project that you can sell for much, much more [than you spent on the applications].”

“This is why you have – in solar alone – 140GW of connection requests.”

These sorts of project speculations are clogging the interconnection queue with projects that lack the fundamentals to come to fruition in the near future. This, Spillati said, lengthens an already bureaucratic approvals process. Terna, the national grid operator, has a three-month period in which it must provide an answer to a grid connection request; “At the beginning, you would get the answer after one month,” Spillati said, “but now, at the end of the 90th day you get the answer because they are so overwhelmed.”

“And in Italy, even if you have the [approvals] centralised at a ministerial level, and that helped to get the large projects environmentally approved…you have the issue that they then go back to the regions for final approval. There you have all these small permits that take a while.”

North-south divide

Local regions and the distribution of solar assets on the grid create another problem for Italy. According to the 2011 census, Italy’s most densely populated areas – and its densest electricity demand – are predominantly in the north, but its solar irradiance levels are higher in the south, and subsequently, more solar projects are deployed there.

The physical reality of moving electrons the length of a country is a challenge for useful solar development in Italy, as there are limits to what the transmission grid can do.

Picking up on another prevalent theme at the LSS EU conference, Spillati said that this reality opens up the opportunity for energy storage projects co-located with solar PV. “The only solution is storage,” he said, “there’s no other way. It costs much less – especially now with the decreasing CAPEX [of storage plants] – than adding kilometres and kilometres of grid.”

“Plus, if permitting is an issue for PV plants, can you imagine it for hundreds of kilometres of grid? The short-term answer is storage.”

He cites Chile, where his company, Limes, owns solar and storage assets under development, and where “it’s impossible to operate our solar plant” without the use of storage because of curtailment. He predicts that “it will come to that level” in Italy “because you need it for the grid…and the demand for colocation will skyrocket.”

PV Tech Premium published a feature on the emerging business case for co-located solar and storage last month, during the course of the LSS conference.

Terna, the Italian grid operator, recently announced an €18 billion investment over the next five years to modernise and develop the Italian transmission grid. Primarily, the upgrades will support a shift towards a decentralised system as more PV, energy storage and other renewables come online. Investment of this scale has the potential to free up the backlog and disparity in the market and build on the momentum from 2023.

An EPC drought

Another major hurdle that Spillati sees is finding an EPC contractor to facilitate project construction.

“You need to find a bankable EPC, and there just aren’t enough – definitely in Italy,” he said. He said this is a symptom of the makeup of the construction and engineering markets more generally in Italy. Shortages of bankable companies lead to a lot of competition for contracts and, subsequently, high contract prices to get a project built.

PV Tech Premium asked him if he saw the potential for EPC framework agreements to emerge in Italy like the one signed between Sonnedix and Eiffage to work on an 858MW solar project portfolio across Europe.

“If you look at the way construction companies are organised in Europe, you see that the major Italian EPCs are not involved in solar,” Spillati said. “You have [major construction firms] Maire Tecnimont and Bonatti…their main market is oil and gas. Then you have the companies that build roads, concessions, etc. Again, they are not in solar.”

He compares Italy to Spain, where major EPC Vinci acquired the solar and renewables development arm of ACS Group, another construction firm. “That’s something that is missing in Italy”, he said.

“So you don’t have large EPCs with large bank balances that can take the framework agreements.”

This is partly due to the smaller average size of solar plants in Italy compared with other European countries—the country is fairly mountainous, and flat land is concentrated in certain areas. EPCs can’t make the ten- or one-hundred-million Euro deals that can provide an economy of scale and greater bankability for solar development.

As with many of the discussions at the Large Scale Solar EU conference, hurdles and restraints holding PV projects back across Southern Europe seemed to fade into the background against a wider, more pervasive optimism.

Spillati said that, with the subsidies for rooftop PV which have driven a lot of Italian solar additions coming to an end, he is expecting “almost three times the amount of utility-scale solar as in 2023” and that “the average size of projects is going to get bigger”.

26 November 2024
Málaga, Spain
Understanding PV module supply to the European market in 2025. PV ModuleTech Europe 2024 is a two-day conference that tackles these challenges directly, with an agenda that addresses all aspects of module supplier selection; product availability, technology offerings, traceability of supply-chain, factory auditing, module testing and reliability, and company bankability.
17 June 2025
Napa, USA
PV Tech has been running PV ModuleTech Conferences since 2017. PV ModuleTech USA, on 17-18 June 2025, will be our fourth PV ModulelTech conference dedicated to the U.S. utility scale solar sector. The event will gather the key stakeholders from solar developers, solar asset owners and investors, PV manufacturing, policy-making and and all interested downstream channels and third-party entities. The goal is simple: to map out the PV module supply channels to the U.S. out to 2026 and beyond.

Read Next

June 28, 2024
The Net-Zero Industry Act will come into force starting from 29 June 2024 across all 27 member states of the EU.
June 28, 2024
Renewable energy sources provided 44.7% of the EU’s electricity consumption in 2023, according to data from Eurostat, the European Commission’s statistical office.
June 28, 2024
New South Wales, Australia, has received planning approval for the Central-West Orana REZ transmission project.
June 28, 2024
AEMC has published a ‘final rule’ claiming it will “create a more clear and pragmatic grid connection process” and aid solar deployment.
June 27, 2024
PV Tech spoke with Alejandra Pérez-Plá, regional manager – Mediterranean at financial advisory firm Global Capital Finance about challenges related to land acquisition for utility-scale solar PV projects in Southern Europe, how to manage these issues and grid modernisation.
June 27, 2024
EDP Renewables has signed PPAs with a US-based tech company to offer power through its 176MWp solar projects.

Subscribe to Newsletter

Upcoming Events

Solar Media Events
July 2, 2024
Athens, Greece
Solar Media Events
July 9, 2024
Sands Expo and Convention Centre, Singapore
Upcoming Webinars
July 10, 2024
9am (BST) / 10am (CEST)
Solar Media Events
September 24, 2024
Warsaw, Poland
Solar Media Events
September 24, 2024
Singapore, Asia