Italy may meet 5-10 percent of its total power needs from solar panels by 2020 as it boosts incentives to develop the sector, the head of an industry association said on Tuesday.
"Photovoltaic energy may cover 5-10 percent of global power demand in the future," said Gert Gremes, chairman of GIFI, a body grouping 45 companies in Italy that are active in photovoltaic energy, which turns sunlight in power.
Italy, which lags behind European leaders like Germany in developing green energy, aims to catch up with Europe's efforts to fight global climate change and passed a law in February to boost incentives for photovoltaic energy generation.
"We hope that in Italy too it will happen by 2020, if all the existing incentives are developed," Gremes told Reuters at the European photovoltaic energy conference in Milan. The long-awaited law has scrapped limits on annual incentives to install new solar modules, boosted subsidies for households to put solar batteries on roofs to generate power and obliged newly built houses to have integrated solar systems.
Sector experts at the conference said the law would trigger an explosive growth of photovoltaic energy generation in sun-lit Italy and draw billions of dollars in investments as generation costs - currently about double the cost of traditional fuel-fired generation - were set to fall.
Gremes said Italian sector players needed additional incentives to reach a target, set by the law, of 3,000 megawatts of photovoltaic energy capacity installed by 2016, up from the tiny total of 50 MW installed by the end of 2006. "The law has an enormous potential. A 1,200 MW capacity for which incentives are already guaranteed can be installed within a year," he said.
More money for boosting photovoltaic energy may come from a special 3.5 billion euro ($4.76 billion) fund, which was set up to finance renewable energy withpart of the proceeds from electricity bills but has been largely used to finance power generation by oil refineries, Gremes said.
He said solar energy generation may reach grid parity, or competitiveness of prices with traditional generation, within 10-15 year in Italy as solar costs were set to fall while oil prices were likely to rise. This is a goal keenly watched by investors.