Italy Soars - Solar Style

Solar energy has really taken off in recent years, as global governments have become more aware of the need to protect the environment by minimizing the use of dwindling fossil fuels. The use of renewable energy, such as solar power, has previously been encouraged by government subsidies.

Italy is set to overtake Spain as Europe's biggest solar power, as Spain's market has recently dropped due to an end to solar subsidies from the government. Ernesto Macias is the managing director of Isofoton, Spain's biggest solar panel maker and is hoping that the solar market in Italy may expand to reach 1,200 MW next year, which is the maximum solar output that is still entitled to subsidies under existing regulations.

Macias, who is also head of the European Photovoltaic Industry Association (EPIA), spoke about the matter at a solar power conference in Valencia, Spain; "I personally think Italy will reach its cap in 2009. Much will be derived from Italy, so we will saturate Italy, but what we need is a plan to coordinate between the various countries, and we are working with the (European) Commission on that."

Spain's solar power market is now one of the biggest in the world and has grown to 1,000 megawatts this year. It has grown on the back of 'feed-in' tariffs, which are designed to make solar electricity grow as competitor to conventional power sources. However this scheme has created a multi-billion euro bill for the government, alongside the massively rising costs of subsidising household electricity bills, so they have chosen to end the tariffs in September '08. The Spanish plans to cut the capacity of solar power plants entitled to feed-in tariffs down to 300 MW next year, have caused global Solar power stocks to fall.

However despite the rise for Italy, Macias did not think the growth prospects for Germany were so good, the leading solar panel makers Suntech said they have been unable to meet demand due to growth in Spain. "There is a lot of uncertainty in Germany due to the reduction in feed-in tariffs. That could force prices down and ultimately benefit Asian industries".

Macias feels that in Spain the solar industry had become somewhat out of control and the new scheme of subsidy cuts was actually necessary. However he felt that negotiations needed to be made about the proposal. "I don't want caps, but if I want to compromise, to open talks, OK, we will accept a cap of 400 MW for plants bigger than 100 kilowatts. But please don't apply any caps on the retail market," he said.

The advantage of solar power is that it eradicates the need to build expensive power grids and has low maintenance costs. Macias also believes that there are opportunities for solar panel production in rural electrification projects in developing countries. "It is also an energy that doesn't need fuel -- no need to transport coal, oil or gas, and there you have competition". Several European renewable energy companies and industry groups including EPIA have formed the 'Alliance for Rural Electrification' to promote what they say are affordable and sustainable small-scale generation projects in poorer countries.