Mario Draghi’s administration has replaced market-driven electricity prices for the rest of the year and replaced them with tariffs based on historical averages. With solar plant operators among those affected, the European trade body for PV is not amused.

Trade body SolarPower Europe has called on the Italian government to abandon an emergency measure introduced late last month to protect electricity users from soaring bills.

Article 16 of Italian Law Decree 04/22, published on Jan. 27, replaces generator payments linked to the current high wholesale energy prices with fixed returns based on average historic tariffs across different zones of Italy.

The government introduced the measure to shield electricity users from the impact of skyrocketing bills driven by surging international gas prices but SolarPower Europe said the dampening effect it will have on solar plant owner income will further hold back the energy transition in a nation where sluggish permitting is already a deterrant to renewables.

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A post published on the website of the European solar membership body on Thursday called for Article 16 to be removed as it could lead to government, rather than market-led, fixed prices for future solar power purchase agreements and said the emergency legislation would shake the confidence of clean energy investors, jeopardize the EU’s emission reduction ambitions, and hinder the functioning of the bloc’s internal electricity market.

SolarPower Europe said Article 16 is incompatible with a toolbox of measures the European Commission suggested EU member states could use to protect electricity users from rising bills, although the trade body did not spell out how the Italian measure was incompatible.

And the membership body said similar interventions made by the governments of Spain and Romania last year had been reined back in scope because of the instability they introduced into electricity markets. Reuters in September reported on the Spanish government’s emergency measure to transfer billions of euros banked by energy companies in extraordinary profits to make payments to consumers and to cap energy prices.

SolarPower Europe said Article 16 affects the “vast majority” of solar projects in Italy, which receive feed-in tariffs under the nation’s various Conto Energia laws. Unsubsidized, “merchant” solar plants will also, like incentivized plants, receive a fixed return for each unit of electricity generated for the remainder of the year, based on historic average prices, rather than being able to take advantage of high tariffs on the wholesale market where their energy is usually sold, although exceptions were made for PPA-driven projects whose tariffs are not linked to spot market energy prices.

SolarPower Europe said the Italian government should “initiate a constructive dialogue to define effective and balanced solutions to tackle the energy price rises.”

This copy was amended on 08/02/22 to reflect the Italian measure affects solar plants in receipt of feed-in tariffs under Conto Energia legislation, rather than feed-in premium payments, as previously stated. The fact PPA-led facilities not linked to the spot energy price are not covered by the measure has also been added to the information published by SolarPower Europe.