- The EU has green signaled Italy’s scheme to provide state aid for local manufacturing of equipment necessary for a net-zero economy
- It entails providing direct grants to companies in the production of solar panels, and other clean energy equipment
- Grants from the €1.1 billion scheme can be offered latest till December 31, 2025
The European Commission has authorized Italy to use the proceeds from its Recovery and Resilience Facility (RRF) to fund projects that produce equipment needed for the country’s transition to a net-zero economy. Relevant equipment for the production of solar panels are part of the plan.
The €1.1 billion ($1.2 billion) scheme will also encourage local production of batteries, wind turbines, heat-pumps, electrolyzers, equipment for carbon capture usage and storage, as well as key components designed and primarily used as direct input for the production of such equipment or related critical raw materials necessary for their production.
State aid will be provided through direct grants with a single beneficiary standing to win up to a maximum of €150 million. It can go up to €200 million for companies located in regions eligible for aid under the Treaty on the Functioning of the European Union (TEFU) for areas identified under ‘c’ category. These refer to regions that represent former ‘a’ areas and sparsely populated areas.
Up to €350 million will be offered to beneficiaries located in regions classified as ‘a’ areas. These represent the most disadvantaged regions and regions whose GDP per capita is below or equal to 75% of the EU average.
Finding the Italian scheme necessary, appropriate and proportionate to accelerate the green transition and facilitate the development of certain economic activities, the commission says this aligns with the targets spelt out in the Green Deal Industrial Plan (GDIP). The grants can be offered till December 31, 2025.
Solar manufacturing initiatives are gradually growing in Italy and with this EU green signal, the momentum is likely to pick up pace.
Enel Green Power had a 200 MW heterojunction (HJT) solar module fab in Catania that’s currently being replaced by 3 GW capacity. SoliTek had announced plans to build a 600 MW module fab in Benevento region last year. Very recently in January 2024, EPC company Comal won a government tender to build a solar panel manufacturing facility in L’Aquila province (see Italian EPC Company Venturing Into PV Manufacturing).
Italy aims to grow the share of renewables to 65% in its electricity consumption by 2030 under its updated National Energy and Climate Plan (NECP). The country had a total installed capacity of over 30 GW at the end of 2023 (see Italy Exceeded 30 GW Cumulative Solar PV Capacity In 2023).
Approved under the State Aid Temporary Crisis and Transition Framework, this clearance from the commission for the Italian scheme follows similar schemes it recently approved for France and Portugal to support local manufacturing of solar panels, among others (see EU Backs Portuguese Plans For Net-Zero Equipment Production).
