The approval comes at a critical moment for the Italian market. While the country added a record 7.2GW of renewable capacity in 2025, it\u00a0remains\u00a0below the annual deployment rate of\u00a0nearly 10GW\u00a0required\u00a0to reach its target of around 130GW of installed renewable capacity by the end of the decade.<\/p>\n
Early 2026 figures also suggest momentum\u00a0remains\u00a0uneven, with solar installations slowing in both the residential and utility-scale segments.<\/p>\n
Speaking to PV Tech Premium, Patrizio Donati,\u00a0co-founder and director at\u00a0Terrawat, discusses the significance of the scheme for developers, the opportunities it creates for Italy\u2019s solar sector, and whether the country\u2019s current deployment trajectory is sufficient to meet its ambitious energy transition goals.<\/p>\n
\u201cIn essence, it\u2019s a\u00a0CfD\u00a0mechanism,\u201d\u00a0Donati says.\u00a0\u201cThat is\u00a0significant\u00a0in the sense that there\u00a0aren\u2019t\u00a0really any other kind of long-term supports available in Italy.\u00a0This gives a lot of security to energy producers. Power prices can be quite volatile, as\u00a0we\u2019ve\u00a0seen.\u201d<\/p>\n
Under the scheme, developers receive payments when market prices fall below an agreed strike price and return revenues when prices exceed that level.<\/p>\n
That volatility has become increasingly\u00a0apparent\u00a0in recent years, with European energy markets exposed to geopolitical events ranging from\u00a0Russia\u2019s invasion of Ukraine<\/a>\u00a0to ongoing tensions in the Middle East<\/a>.<\/p>\n While policymakers\u00a0ultimately want\u00a0to bring wholesale electricity prices down, Donati argues that sudden price swings in either direction create challenges for investors and project developers alike.<\/p>\n A support scheme cannot solve\u00a0\u2018systemic\u00a0problems\u2019<\/p>\n Despite the scale of the FER X programme, Donati is sceptical that Italy can achieve its current 2030 renewable energy targets.<\/p>\n The country aims to reach around 130GW of installed renewable energy capacity by 2030. By the end of 2025, Italy had approximately 83.5GW installed, leaving a substantial deployment gap.<\/p>\n Italy added around 7.2GW of renewable capacity during 2025, but industry estimates suggest annual additions closer to 10GW are\u00a0required\u00a0throughout the\u00a0remainder\u00a0of the decade.<\/p>\n \u201cI think the 2030 targets as\u00a0stated are fairly out of reach,\u201d\u00a0Donati says.\u00a0According to\u00a0him, Italy has consistently failed to achieve the annual installation rates\u00a0required\u00a0to remain on track.<\/p>\n \u201cThe reality is that\u00a0we\u2019ve\u00a0never\u00a0achieved\u00a0the annual level of installations needed to hit the 2030 targets. At this point, the 2030 targets are\u00a0quite firmly out of reach unless something systemic changes not on the support scheme side, but on the permitting side,\u201d he emphasises.<\/p>\n The introduction of revenue support may improve investor confidence, but projects still need to navigate a highly fragmented permitting system before reaching construction.<\/p>\n However, Donati argues that the support scheme is a \u201cboon for investors.\u201d<\/p>\n \u201cWe might not hit the targets, but we\u2019re going to have to get these projects online at some point and having revenue certainty is a great boon to investors who obviously are the main engine behind getting these projects developed and built on the ground.\u201d<\/p>\n Italy\u2019s permitting maze<\/p>\n For Donati, permitting\u00a0remains\u00a0the single most\u00a0important issue\u00a0affecting renewable deployment in Italy.\u00a0The challenge stems partly from the interaction between national and regional authorities. Different regions\u00a0operate\u00a0under different rules, creating uncertainty for developers\u00a0attempting\u00a0to build projects across multiple\u00a0jurisdictions.<\/p>\n \u201cPermitting in Italy is incredibly complicated,\u201d\u00a0he\u00a0says. \u201cThere are so many moving parts. There are so many different layers of regulation.\u00a0We have national level rules and then we have regional rules\u00a0and a lot of the times\u00a0you\u2019ll\u00a0have regional rules that are in contrast with national rules.\u201d<\/p>\n This\u00a0results\u00a0in\u00a0prolonged development timelines, even for\u00a0relatively straightforward\u00a0projects.\u00a0According to Donati, government intervention could have the greatest impact by simplifying and accelerating project approvals rather than introducing\u00a0additional\u00a0support mechanisms.<\/p>\n \u201cThe main way that the government can play [is] where and how quickly these projects can be permitted,\u201d he says.<\/p>\n Grid connections\u00a0remain\u00a0a growing bottleneck<\/p>\n Alongside permitting, grid access continues to constrain deployment.\u00a0Italy\u2019s transmission and distribution operators have increased investment in network upgrades, but connection timelines have lengthened as project pipelines expand.<\/p>\n \u201cThe grid is a big physical bottleneck,\u201d\u00a0says Donati.\u00a0\u201cThe only way out for a grid is\u00a0lots of investment\u00a0and\u00a0development.\u201d<\/p>\n While upgrades are underway, developers continue to face significant delays.<\/p>\n \u201cProjects are being upgraded to high-voltage transmission lines which improved the distribution networks. But it also means delays in connection\u2014a few years ago it could take around 100 days for a project to be connected, now it can take up to two years.\u201d<\/p>\n The importance of strike prices\u00a0<\/p>\n As with any\u00a0CfD\u00a0mechanism, the success of FER X will\u00a0ultimately depend\u00a0on strike prices.<\/p>\n \u201cThe strike price is everything,\u201d\u00a0Donati\u00a0emphasises.\u00a0As support will be awarded through competitive auctions, developers face pressure to bid aggressively\u00a0in order to\u00a0secure contracts.\u00a0Recent experiences in Italy\u2019s battery storage auctions illustrate the risks associated with highly competitive tender processes.<\/p>\n