Italians See Solar Microgeneration Projects As Sound Investment

As Margaret has pointed out here, the benefits of harnessing solar power for an urban environment are many. This WSJ article provides an example of the advantages of solar microgeneration from the other side of the world—in Italy, a rapidly expanding solar market with plenty of sun to spare. In order to lessen the pain of high energy costs, Italian households and small companies have begun adopting renewable energy microgeneration projects, the most popular of which are rooftop solar panels and wind turbines. These efforts at small-scale, in-house electricity production also have the potential to lift a heavy burden from Italy’s energy infrastructure, which is “severely hampered” by the country’s notorious bureaucracy.

Furthermore, Italy—whose electricity demand is forecast to grow an annual average of 0.6 percent between 2009 and 2013—aims to generate 17 percent of its energy from renewable energy by 2020, a goal whose feasibility some have cast doubts upon. In a country known for its bureaucratic red tape, which greatly hinders the completion of large power plants, some have suggested that small-scale utilities may be the way to go. Further adding appeal to microgeneration is its potential for increased energy security, no small deal for a country that imports over 80 percent of its energy supplies.

“I’d say about 20% of Italian buildings could be used for microgeneration,” said Giovanni Battista Zorzoli of ISES Italia, a technical-scientific nonprofit association, which organizes courses on renewable energy. “The incentives are such that families, thanks also to bank loans, can easily make such investments.”

And what exactly would incite banks to provide loans so readily?

According to energy research body Institute Osservatorio sull’Industria delle Rinnovabili, “building-integrated” photovoltaic investments in Italian buildings could potentially amount to about EUR42 billion in the 2009-2020 period. ISES Italia’s Zorzoli estimates photovoltaic power could generate about 6% of Italy’s electricity needs in 2020.

The article uses the case of a suburbanite mother with two kids to further illustrate its point.

In 2007, Miriam Di Palma, a married, working mother of two teenage girls who lives on the outskirts of Rome, installed 5 kilowatts of panels for about EUR37,000, which included some roof work.

She sells the power generated, in excess of her needs, to the grid for a heavily subsidized price, while buying power back when she needs it by paying the lower usual market rate to her local utility, pocketing the profit. Di Palma receives EUR0.42 per kilowatt-hour while the average price of electricity her utility charges is about EUR0.20/kWh.

…

Such investments have what amounts to a state guarantee of a fixed return for a fixed period, a degree of security against which banks are very willing to make loans, experts said.

Granted, Italy is by no means a perfect solar correlation to the United States. Different cities in the U.S. can have wildly different variations of insolation, and not all tax rebates are created equal. Add to that worries over Italy’s solar sector overheating, and the situation is not perfect. But it is an example of how solar can make sense for city-dwellers and suburbanites alike—especially when the financial incentives are good.