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Solar PV Power Plant Fire Sale Approaching In Italy?

Due to the impending retroactive changes to Italy’s feed-in tariff, the country’s markets will soon be swamped with cheap solar PV power plants up for sale, according to a noted firm.

Owing to the approaching retroactive changes — due to be enacted at the beginning of 2015 — many projects in the country are expected to crash, with banks presumably selling said projects off at “rock-bottom” prices in an already over-saturated marketplace, according to the head of German firm Solar8.

Image Credit: Solar Italy via Wikimedia Commons

Said president, Andreas Hoynigg, stated, in an interview with PV-Tech: “There are already many, many plants on the market but the foreclosure sales, the big sell off, will start next year. Many of the owners can’t pay the interest of their financing anymore [due to policy changes] so the Italian banks are selling the plants but this takes time. They have to go to court and wait for a decision and the Italian courts move extremely slowly. So we believe the big sell off will start next year.”

The referenced changes to the FiT program will see the “guaranteed price” of €0.07/kWh removed and retroactive reductions in FiT payments enacted. As it stands currently, the market price for electricity in Italy is about €0.03/kWh.

Owners of solar projects in the country have been given the option of spreading their payments across 24 years rather than 20; an absolute cut of 7-9%, depending on plant size; or a complex new payment schedule with a 15% cut in payments in the near-term in exchange for a 15% increase in the long-term.

According to Hoynigg, given the fact that there are already few buyers in the market, prices are likely to fall through the floor once the changes are enacted.

“You can’t finance plants at the moment,” Hoynigg continued. “There are thousands for sale and no buyers, and secondly the Italian banks have no money. Traditionally there was an Australian firm and some Russian investors but now there are very few buyers left in the market. We’re in the situation now with our finances that we may – very carefully – consider buying again.”

Hard to make a prediction on the long-term health of the market there just yet. The decision to enact these changes seems like such an incredibly poor one on so many levels (as we’ve noted before) — but I would be hesitant to say that there is no future for solar energy in Italy. The takeaway, I’d say, is that any investor looking at investing in solar in Italy will be making what appears, as of right now, to be a real toss-up of a bet, in my eyes anyways.

Image Credit: Solar Italy via Wikimedia Commons

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Written By

James Ayre's background is predominantly in geopolitics and history, but he has an obsessive interest in pretty much everything. After an early life spent in the Imperial Free City of Dortmund, James followed the river Ruhr to Cofbuokheim, where he attended the University of Astnide. And where he also briefly considered entering the coal mining business. He currently writes for a living, on a broad variety of subjects, ranging from science, to politics, to military history, to renewable energy.


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