Did Italy install two or seven GW in 2010?
While the world had its eye on the German market, which is expected to have installed a record 7-8 gigawatts of photovoltaics last year, breaking the old record of 3.9 gigawatts it set in 2009, Italy may have installed almost as much.
Yesterday, Paul Gipe, who covers international news related to feed-in tariffs, announced that Italy had installed two gigawatts of photovoltaics in 2010 with another four gigawatts "in the pipeline." But this morning, Germany's Photon Magazine had a different reading of the press release (in Italian) from Italian grid operator GSE. As Photon explains, three gigawatts was installed and connected to the grid last year, with another four installed by the end of the year but not yet connected to the grid. Under Italian law, these systems must receive a grid connection by the end of June 2011 to be eligible for the feed-in tariffs applicable at the end of 2010.
In other words, depending on how you count it, Italy either installed three gigawatts last year and will top that with another four gigawatts in the first half of 2011 alone -- or it installed seven gigawatts last year.
The press release itself -- here in a version in English translated by Google Translate -- has the seven GW figure in its title, and we see that 1,850 megawatts is the figure for installations that have been completely processed. The figure rises to 2,800 megawatts if we add on the applications that the GSE is still processing, and that figure rises again to 3,000 megawatts because "questions about last year will continue to get to the GSC by the end of February."
Those systems are spread across an estimated 150,000 plants, putting the average system size at around 20 kilowatts, which is also in line with what is common in Germany, where small systems dominate the market. The remaining estimated 4,000 megawatts, which were completely installed by the end of 2010 but have not yet submitted all the paperwork, is spread across only 55,000 plants, bringing the average system size up to 72 kilowatts. Obviously, we are talking about a number of larger systems here, and the owners probably mainly focused on completing installation by the deadline rather than on filing the paperwork, for which they still have time.
Similar rushes have occurred elsewhere when feed-in tariffs were drastically cut and companies raced to install systems by the deadline -- Spain being the most prominent example. We now know that a lot of the systems installed during that rush in Spain were a rushed effort. The December issue of "new energy" reports that up to 30 percent of the systems installed during the Spanish boom may now not be working properly. Policymakers would therefore be well advised not to put feed-in tariffs to such an abrupt end.
Italy's performance over the past year is tremendous, but it is also a shock to the Italian system. At the end of 2009, the country had installed a total of 1,142 megawatts, so even the lowest figure for 2010 (1,850 megawatts) represents growth far exceeding 150 percent. The country will clearly have an installed capacity of far more than 8,000 megawatts by the end of June, putting it past its target for photovoltaics in 2020.
The question, of course, is how policymakers in Italy will respond. Market analysts are already concerned that Italy might become "Spain 2.0," as this well researched article at The Street shows. Italy had already reduced its support for photovoltaics as of this year, but investors worry that the Italians might follow the example of Spain and the Czech Republic and renege on the agreement to pay the old rates. (cm)
