Overall Cap for Tax Reductions in Italy

Dark clouds are beginning to appear over the prospects of the solar thermal market in Italy. On the 29th November 2008, the Italian government published a temporary law for modifying the 55% tax reduction that has driven the solar thermal market in recent years. The temporary law has to be approved by the Italian parliament within 60 days, otherwise it expires.

The temporary law contains a cap of €80 to 100 million for granting annual tax reductions, informs the Italian Solar Thermal Association (Assolterm). "We see big problems emerging," says Valeria Verga, Assolterm's general secretary. In 2007, the value of applications for solar thermal systems alone added up to €138 million. Tax reductions are also granted for taking on other energy efficient measures within existing buildings. The cap would be in effect between 2008 and 2010.

Furthermore, administrative procedures would become less transparent. “If the National Fiscal Agency does not answer within 30 days, the application for the tax reduction is not approved. The answer does not depend on the achievement of the cap”, explains Assolterm in a press release. Hence, only one in ten applications might still receive a tax reduction.

The association worries that the great market development of recent years will come to a halt. The collector area newly installed in 2007 increased by 77%, from 186,000 m2 to 330,000 m2, according to a survey of Assolterm among 20 manufacturers and system providers. Flat plat collectors are the dominating technology throughout the market with a share of more than 80%. The percentage of forced circulation systems has risen from 63 to 70% in one year. For 2008, the association estimates a growth of 20 to 30%.

  Installed collector area 2006 [m2] Market share 2006 Installed collector area 2007 [m2] Market share 2007
Total 186,000   330,000  
Flat plate collectors 156,240 84% 278,000 84%
Vacuum tube collectors 26,040 14% 52,000 16%
Thermosiphon systems 65,100 35% 98,000 30%
Forced circulation systems 117,180 63% 232,000 70%


Table: Results of the annual market survey carried out by Assolterm. The figures for 2008 will be published at the Solarexpo 2009 in Verona, Italy, in May 2009.Source: Assolterm

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