MILAN - Italian renewable energy company TerniEnergia is set to exceed its 2009 target for new solar installations and may review 2010 and 2011 goals aiming to expand in the rapidly growing market, its chairman told Reuters.
Photovoltaic (PV) installations which turn sunlight into power have mushroomed in Italy since 2007 when the government approved new incentives, among the most generous in Europe. Investors ranging from families to utilities and from banks to sports car maker Ferrari have piled into the sector.
TerniEnergia, a leading PV system integrator, has built and prepared for grid connection about 22 megawatt (MW) of PV capacity in Italy so far this year, its chairman Stefano Neri told Reuters in a telephone interview.
We have already reached (annual) target ahead of time ... We still have other work to do in the final quarter, Neri said. By the end of this year we will review the (2010 and 2011) targets, but surely we plan to increase our production in 2010.
Under its 2009-2011 industrial plan, TerniEnergia aimed to install 22 MW of PV capacity in 2009 and raise the new installed capacity targets to 29 MW next year and to 37 MW in 2011.
22 MW is about 4 percent of all PV installed capacity in Italy.
TerniEnergia said in a statement on Monday it has completed and tested a 3 MW peak capacity PV plant in Umbria, central Italy, one of the biggest in the country and able to produce 4 million kilowatt hours of power a year.
The company which has bought three small unlisted companies this month to implement industrial size PV plants with a total capacity of 13 MW in the southern region of Puglia in the first quarter of next year, plans to continue with the buying spree.
Given demand that we see on the strongly expanding market, we have decided to buy companies which already have approved projects. This will allow us to speed up our production activity and increase the quantity of implemented projects, Neri said.
CREDIT CRUNCH EASING
The credit crunch which has practically frozen access to some forms of financing, such as leasing, from October last year has been easing and financing conditions in the Italian PV sector have improved in the past few months, he said.
Falling operating costs due to a sharp drop in solar panel prices also helped to facilitate access to funding, he added.
The PV sector operators want to know as soon as possible how the government would change the existing incentive scheme including a feed-in tariff which guarantees operators up to 0.49 euros per KWh of produced power for 20 years, Neri said.
We would appreciate it if the indications of the new incentive scheme were given well in advance. It will give the company a chance to adjust its strategy, he said.
The current incentive scheme puts a 1,200 MW cap on capacity to be covered by incentives. Neri said he doubted the limit would be reached in 2010, as widely belived by sector operators, because of bureaucratic hurdles and grid connection delays.
Italy's PV sector, made up mostly of numerous small and unlisted project developers is likely to regroup in the next couple of years, with companies dealing with industrial-size projects consolidating around big players, while small companies would carry with household-size installations, he said.
(Editing by Keiron Henderson)