Italian ministry backs more funds for renewable energy in 2008 budget

Italian ministry backs more funds for renewable energy in 2008 budget

	Published : Fri, 13 Jul 2007 13:46 By : Agencies Print this Story

ROME (Thomson Financial) - Italy's 2008 budget, due to be presented in September, should confirm existing fiscal support for renewable energy sources, as well as add funds for domestic solar panel production, said Fabrizio Fabbri, head of the technical secretariat at the environment ministry.

This governments 2007 budget includes measures to support renewable energy sources, but in the photovoltaic solar panel sector has encouraged imports of panels, rather than supported Italian production, he said.

'Apart from hydroelectric power, Italy has abandoned renewable energy in the 1980s. Now there are incentives for solar panels but all the capital investment to buy panels has gone abroad to Japan or Germany,' he said.

'There is a need to intervene to help industrial production start up. Renewable energy sources can become a strategy for economic growth as well,' he said.

CIR unit Sorgenia is considering launching production of photovoltaic solar panels, while the Merloni family is considering production of solar-powered thermal panels, he said.

Italy is aiming for 3,000 MW electricity production from photovoltaic sources in 2016, and once the 2,000 MW level is reached renewable tax incentives will have to be reviewed, he said.

Pirelli & C SpA recently set up a joint venture with private equity firm Global Cleantech Capital to instal photovoltaic panels to support power in buildings, boosting the scope for long-term tax incentives.

Fabbri said the cost of producing electricity from solar panels is expected to fall below the cost from fossil fuels in 2020-2025, as solar technology improves, while wind power is already close to fossil power costs.

Italy currently produces about 14 pct of its electricity from renewable sources, with 72 pct of this coming from hydropower, 10.7 from geothermal sources, 4.7 from wind power, and 0.1 from solar, he said.

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