Italy’s new solar incentive scheme, aimed at boosting renewable energy and domestic production, has been criticized by the European solar manufacturing sector for favoring specific technologies, raising concerns about its potential impact on market competition and the broader solar supply chain.
The Controversial Italy solar incentive
A new Italian tax incentive, part of the country’s 2026 budget, has sparked significant controversy among European solar manufacturers. The measure, known as the “Iperammortamento,” is designed to support and accelerate the country’s green transition by promoting investment in high-efficiency, locally-produced solar panels. While the goal of strengthening the Italy solar tax credit system is laudable, the specific eligibility criteria have drawn sharp criticism for being overly restrictive.
In a joint statement, eleven European module makers, including firms like Bisol, FuturaSun, and SoliTek, have called on Italy to amend the provisions. They argue that the incentive, in its current form, creates an unfair market advantage for a very small subset of technologies and producers, potentially hindering the rapid growth of Italy solar installations needed to meet national targets.
A Narrow Preference for Heterojunction Technology
The core of the criticism lies in the incentive’s strict technological requirements. To qualify for the tax benefit, projects must use European-made heterojunction (HJT) bifacial modules with a cell efficiency exceeding 24% or tandem perovskite modules. Manufacturers argue this effectively excludes a wide range of other commercially available and highly efficient technologies, such as tunnel oxide passivated contact (TOPCon) and back-contact modules, which are key parts of the modern solar panel manufacturing process.
The group of manufacturers contends that this narrow focus creates what they call “a clear restriction of the market.” Furthermore, they point out that tandem perovskite modules are not yet widely available at a commercial scale, making the incentive’s practical application even more limited. This effectively funnels demand towards a single technology, which critics say primarily benefits 3Sun, a large Italian manufacturer controlled by Enel. This situation raises serious questions about fair competition within the Italy Solar Panel Manufacturing Report | Market Analysis and Insights landscape.
Broader Concerns About Market Distortion
The implications of this technology bias extend beyond simple product choice. The protesting manufacturers warn that the policy could lead to several negative outcomes. By limiting the pool of eligible suppliers and technologies, the incentive could drive up procurement costs for developers and, ultimately, for end customers. This could affect the overall solar panel manufacturing plant cost breakdown for new projects in the region.
Moreover, concentrating the market on a niche technology could slow down the broader development of the solar market in Italy. It limits installation options and reduces the competitive pressure that drives innovation across the industry. Instead of fostering a resilient and diverse European manufacturing base, the policy risks creating a protected monopoly, undermining the larger goal of strengthening EU energy security solar : Essential for 2024 Electrification – PVknowhow. A more inclusive approach to the basics of solar panel manufacturing would support a wider array of companies and technologies.
Impact on Italy’s Ambitious Solar Targets
Italy’s solar incentive is a critical component of its strategy to achieve its renewable energy targets. The nation has an impressive Italian renewable portfolio sees unique solar boost, but achieving future goals requires well-designed policies that foster a healthy and competitive market.
The current controversy highlights the delicate balance between promoting specific next-generation technologies and ensuring broad, rapid deployment. As Italy moves forward, the government’s response to this criticism will be crucial. A revision that broadens the technological scope while still rewarding high-performance, European-made products could resolve the conflict and ensure the incentive successfully drives the country’s energy transition without inadvertently stifling the very market it aims to support.
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