The Recent Change in the Italian Policies for Photovoltaics: Effects on the Energy Demand Coverage of Grid-Connected PV Systems Installed in Urban Contexts

Aldo Orioli, Vincenzo Franzitta, Alessandra Di Gangi, Ferdinando Foresta
2016 Energies  
In July 2013, the Italian photovoltaic (PV) support policies changed the feed-in tariff (FIT) mechanism and turned to a tax credits program, which is currently in force. The aim of this paper is to investigate how such a radical change has influenced the electricity demand coverage of the PV systems installed in urban contexts. A methodology, which connects the economic assessment to a detailed architectural and energy suitability analysis, was applied to some case studies to analyse the
more » ... analyse the relationships between the physical parameters related to multi-storey buildings (roof shapes, number of floors and area of flats) and the most relevant economic and financial features affecting the viability of rooftop PV systems. The study, which considers only the electricity produced by the PV systems that are economically profitable, highlighted that the tax credits scheme is even more effective in covering the electrical consumption of densely urbanised Italian city districts. The results, which are significantly influenced by the latitude of the analysed districts, underline the opportunity for governments to adopt PV promoting policies that are more sensitive to the amount of solar energy available in the different regions of their national territory. Energies 2016, 9, 944 2 of 31 Net metering, which is the simplest incentive for renewables, allows residential and commercial electric customers to feed generated PV electricity that they not use back into the grid [1] [2] [3] [4] [5] [6] [7] . This allows customers to offset their electric consumption by the amount of energy that their PV systems generate. Using a specified meter that records the flow of electricity in both directions, consumers can benefit from the total amount of energy they produce, not just the electricity they consume locally. Unfortunately, due to the high costs of the PV electricity, net metering alone may be insufficient to put PV systems in competition with the other traditional energy production technologies [8] . By means of renewable portfolio standards a government places an obligation on electricity supply companies to produce a specified fraction of their electricity from renewable energy sources [3] [4] [5] [6] [9] [10] [11] [12] . The companies are required to acquire renewable energy certificates, also known as tradable green certificates, which are typically equivalent to 1 MWh of electricity created by a renewable resource. To better stimulate the PV development, countries have established targets, known as set-asides or carve-outs, which are provisions that require utilities companies to use a specific renewable source to account for a certain amount of generating capacity or a percentage of their retail electricity sales. Tax credits are financial incentives based on a non-refundable personal income tax credit, which generally applies only to residential renewable energy systems [1,3-6,13]. Governments allow PV systems a credit equivalent to a fixed percentage of the installation price, which usually includes on-site preparation, equipment, labour cost, wiring and piping for connection to the grid. Some countries also adopted financial incentives in the form of cash rebates and capital subsidies, which are amounts of money paid to the PV system owners per watt-capacity of the installed PV field or to compensate a fixed percentage of the investment costs. The FIT scheme provides a constant tariff guaranteed for electricity generated from PV and fed into the grid over a given period of time [1] [2] [3] [4] [5] 7, [9] [10] [11] [12] [14] [15] [16] [17] [18] [19] [20] [21] [22] [23] . FIT payments may depend on the market price of electricity or not. In a fixed-price FIT, the total per-kWh payment is independent from the market price; in a premium-price FIT payment, the total payment is determined by adding a premium tariff, which can be constant or sliding, to the spot market electricity price. Despite FITs seem to be an effective incentive to boost PV technology growth, an optimal FIT must cover the PV project costs, plus an estimated profit, to reduce the investment risk and ensure a return to investors. The implementation of severe FIT de-escalation rates, justified by the PV device prices decrement observed over the last years, or even a PV support policy moratorium, may not guarantee a reliable economic return over the time and compromise the fulfilment of the electricity demand coverage that may be realistically obtained from renewable energy sources. The FIT support, which was promoted in Italy since 2005 by means of some consecutive decrees named "Conto Energia", was discontinued in July 2013. At present, PV systems are incentivised by tax credits that are granted for ten years. Such a new promotion policy has significantly modified the economic convenience of PV systems in Italy. Despite many pessimistic predictions, it seems that the new approach may yield greater advantages for domestic investors and, in turn, increase the amount of electrical consumption covered by the electricity generated by the PV systems installed in densely urbanised areas. With the aim of quantifying the energy effects of the change in the Italian PV support policy, the FIT and current tax credits schemes have been compared for the districts of three densely urbanised Italian cities that are fair representative of the Italian latitudes. The paper is organised as follows: the Italian FIT and tax credits schemes are discussed in Section 2. In Section 3, the methodology used for evaluating the viability of the investment is outlined and the case studies are described. The last sections show the results concerning the effectiveness of both the analysed PV policy schemes on the electricity coverage, also considering the effects of the solar energy shading and mismatch between electricity generation and consumption.
doi:10.3390/en9110944 fatcat:3qzsnrncazd4jeetlhucam7age