Italy Solar Energy Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023-2028)

The Italian solar energy market is expected to register a CAGR of more than 7% during the forecast period.

The COVID-19 pandemic had a slightly negative impact on the Italian solar market as it witnessed a relatively lower growth in 2020. For instance, as per the International Energy Agency (IEA), despite the COVID‑19 pandemic, solar photovoltaic capacity additions in Italy in 2020 were higher than in 2019.

Key Highlights

• Factors such as supportive government policies and efforts to meet power demand from renewable energy sources are expected to drive the market in the coming years.
• On the other hand, high initial investments in installing solar panels and an economic slowdown are expected to restrain the growth of solar energy in Italy.
• However, offshore areas for solar installation are expected to provide ample opportunities for market players in the future.

Italy Solar Energy Market Trends

Increasing Deployment of Solar Photovoltaic (PV) to Drive the Market

• Photovoltaics (PVs) are arrays of cells containing a solar photovoltaic material that converts radiation or energy from the sun into direct current electricity. They consist of various semiconductors, usually silicon, and highly conductive wire to reduce any current loss, making them expensive. However, low operational cost is expected to further lower the costs in the coming years.
• According to a report by SolarPower Europe, in Italy, solar PV's cumulative capacity reached 22.59 GW in 2021. The country plans to add another 7.1 GW by the end of 2025, which may drive the segment's growth in the coming years.
• In September 2022, the country's energy agency awarded 293.7 MW of solar capacity at 42 locations, with the project's capacity ranging in size from 1.5 MW to 85.8 MW.
• In May 2020, the Italian government introduced a new 110% tax rebate for residential PV systems installed along with building energy efficiency modernizations as part of the COVID‑19 pandemic-related economic relief package, which may further support PV deployment in the country.
• Thus, with such ongoing developments and capacity additions supported by favorable government policies, the solar PV segment is expected to dominate the market during the forecast period.

Upcoming Projects and Government Policies Expected to Drive the Market

• The Italian government plans to increase the share of renewables to 55% of its power generation by 2030 and reach a solar capacity of 52 GW. If achieved, this factor will significantly increase solar’s share in renewable energy.
• The number of solar PV systems installed in Italy increased from 160.9 thousand in 2010 to 1,106 thousand in 2021. With upcoming projects, the solar power installed capacity is expected to grow significantly during the forecast period.
• In 2021, to speed up solar deployment, the Italian government announced a Simplification Decree that removes permit bottlenecks. The national grid operator Terna plans to invest USD 21.5 billion over the next 10 years to improve transmission links.
• With ongoing project developments in solar panels, the market for solar panels is expected to grow significantly during the forecast period. For instance, in October 2022, Enel Green Power started works to build an 86-MW solar farm in the Piedmont region, northwest Italy. The new facility will occupy around 130 hectares (321 acres) of land and feature close to 160,000 modules.
• Several auctions for different renewable projects are expected during 2023-2025. The government is aiming to remove market risks by ensuring a unitary tariff, which is for larger plants to have a reference price closer to the market price than under previous incentive plans.
• Owing to the Italian government's future policies and new projects, the solar market is expected to record significant growth in the coming years.

Italy Solar Energy Market Competitor Analysis

The Italian solar energy market is fragmented. Some of the major companies include (in no particular order) Gruppo STG SRL, Sonnedix Power Holdings Ltd, EF Solare Italia SpA, SunPower Corporation, and Enel SpA.

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• The market estimate (ME) sheet in Excel format
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