The Italian Almanac

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Aramengo d'Asti

Out of the Grid

The tiny town of Aramengo d'Asti in northwest Italy is converting to solar energy in the latest sign that alternative energy is growing in popularity. Mayor Francesco Tavolato announced a consortium would be set up to build a 400,000-euro solar plant to convert the sun's energy into electricity and service the town's 640 inhabitants.

Italy is undergoing a solar boom and small plants are particularly popular. According to the state energy management agency, Gestore Servizi Energetici (GSE), in June there were more than 200,000 solar plants with capacity below 20 kilowatts, comprising roughly 90% of all facilities. A growing number of Italian consumers are becoming producers, installing solar modules on homes, apartment rooftops, office buildings and industrial warehouses.

Many developers believe the investment opportunities are attractive. "The way it works now, if you install five kilowatts and only consume three, you can sell the excess," said Luciano Santi of Veronagest, a developer of large-scale renewable projects. Italian incentives for solar projects, known as Conto Energia 4, brings down the base incentive prices for both big and small projects. Yet remuneration is still attractive as technology prices have also decreased. Compared to three or four years ago, the costs for installing a system on a building have roughly been halved, from about 8,000 euros per kilowatt hour to 4,000 euros a kilowatt hour.

While some Italians consume and even sell excess electricity from their solar installations, others are paying for the country's renewable energy support schemes in their electricity bills. In 2010, that amounted to about 2.4 billion euros. However a recent study showed electricity injected into the grid by solar plants had helped to bring down peak hour electricity prices, paying back as much as 32% as the total incentive bill between March 1 and mid-April. The effect should even be more pronounced in the future, as incentive prices continued their decline.