Italy's total installed photovoltaic (PV) capacity is expected to rise to 12.0-12.5 GW by the end of 2011, but the growth will slow next year, the chairman of industry body GIFI said on Thursday.
"By now, we are well above 11 gigawatts of installed capacity … probably we will be at 12.0-12.5 gigawatts by the end of this year," Valerio Natalizia told a news conference.
"Next year, we will see lower figures of about 2.5-3.0 gigawatts (of new installed capacity)," Natalizia said.
Italy's solar market, the world's second-biggest after Germany's, has boomed since 2007 when the government boosted production subsidies. In May, Rome cut incentives to help consumers, who support the scheme through power bills.
With the total installed PV capacity of above 11 GW and about 288,000 solar plants on stream, the total annual cost of incentives is estimated at 4.9 billion euros ($6.8 billion), Italian energy services agency GSE said separately in a statement.
Natalizia, who in September expected Italy in 2012 to add 3.0-3.5 GW of new installed PV capacity, which converts sunlight into power, said the slowdown was largely driven by limits on installations on farmland and by the introduction of a registry for big-scale plants under the current incentive scheme.
The government has introduced a cap on incentives and a registry for big PV installations only, saying such measures would limit speculation on the solar market. Operators say the registry will only increase red tape.
GOVERNMENT MULLS MORE CHANGES
Government plans for more changes to incentives for solar power generation, contained in a draft of a new decree on economic development, are likely to slow market growth even further, Natalizia and another industry official told the news conference.
Under a draft decree, incentives paid to solar power producers in the sun-lit southern regions would be brought in line with those paid in the north, which is likely to mean lowering the important feed-in tariff in the south, said Claudio Andrea Gemme, chairman of electrotechnics association ANIE.
"It is not fair (to introduce changes just few months after the current incentive scheme was approved). The sector needs stability," Gemme said.
He said concerns over possible tariff changes would make it difficult for investors and industrial operators in the Italian solar market to make business plans and for banks to extend financing for solar projects.
Italy's still generous solar market incentives have attracted the world's major PV module makers such as China's Suntech Power Holdings Co Ltd , Trina Solar Ltd , Yilgli Green Energy Holding Co Ltd and U.S. firms First Solar and SunPower Corp .
Natalizia said the draft decree, which is yet to be approved by the government, does not include any concrete proposals on how to align the incentives in Italy, nor any timeframe for it.
Italy's Prime Minister Silvio Berlusconi said on Tuesday there was not enough money to implement the development decree.
