Introduction of subsidies for renewable energy communities

published on 29th February 2024

On 23.01.2024, the decree was published on the website of the Ministry of Environment and Energy Security (known as „MASE”), which regulates the eligibility conditions for the production of electricity from RES plants integrated into self-consumption configurations and establishes the criteria for the granting of funds from the Recovery Plan for the promotion of RES energy communities.

When the decree comes into force, the resolution on self-consumption (known as TIAD) drawn up by ARERA will also come into force.

The decree covers:

Individual self-consumption systems, which enable the remote self-consumption of RES-E by an individual end consumer without using a private grid but the public grid;
collective self-consumption systems, i.e. systems operated by groups of self-consumers acting jointly. In particular, it is required 1) that the self-consumers are located in the same block of flats or building, 2) that the self-generated energy is primarily used for the self-consumers' own needs and, in the case of participation by companies, that participation in the self-consumption group does not constitute the main business activity or corporate purpose;
Renewable Energy Communities (RECs, in Italian „CER-Comunità Energetiche Rinnovabili”), i.e. autonomous legal entities (with or without legal personality) formed by various legal entities (natural persons, SMEs, private law associations with legal personality, territorial and local authorities, including municipal administrations, research and educational institutions, religious institutions, third sector and environmental protection bodies), which regulate their relations through private law contracts. The RES-Es share the RES-E produced by the installations at the disposal of one or more members of the community with the primary objective of providing environmental, economic or social benefits to the members at community level or to the municipalities in which the energy community operates, but not for profit (as in the case of collective self-consumption systems, in the case of the participation of companies, participation in the self-consumption community does not have to be the main activity).

It should be emphasized that the CER decree provides for subsidy tariffs for the jointly consumed share of energy in the form of a „premium tariff”, which is recognized for a period of 20 years and has a value of between €60/MWh and €120/MWh depending on the size of the plant and the market price of the energy. For PV systems, there is also an additional price of up to €10/MWh depending on the geographical location.

In order to qualify for the subsidy tariffs, the configuration must meet certain requirements in addition to those already laid down in the previous decree-law (199/2021), namely:

The installation must not exceed a maximum nominal capacity of 1 MW;
EEGs must be established (with the adoption of a memorandum and articles of association by the shareholders/community members) before the date of commissioning of the installations;
Only SMEs can participate in EEGs as shareholders or members;
The generation plants and the points of withdrawal must be connected to the electricity grid and all connected to the same substation;
The installations must comply with performance and environmental protection requirements and in particular the „Do No Significant Harm” (DNSH) principle;
The EEG must ensure that any surplus from the support tariff is used exclusively for the benefit of consumers other than businesses and/or for social purposes that have an impact on the areas in which the installations are located.

The subsidy application must be submitted within 120 days of commissioning of the systems exclusively via the application form provided on the web portal of the „Gestore dei Servizi Energetici - GSE”. The GSE will then check the completeness of the submitted documents and the fulfillment of the access requirements for the subsidy tariff within three months.

By 23.02.2024, the implementing rules for the granting of the subsidy will be approved and within the next 45 days (i.e. by 8.04.2024) the GSE will activate the platform for the submission of applications.

The decree expires on the 30th day after the 5 GW funding quota is reached, but no later than 31.12.2027.

The decree also provides for plants located in municipalities with fewer than 5,000 inhabitants to contribute up to 40 percent (a percentage that varies depending on the investment costs and capacity size of the plant) of the eligible costs for the development and implementation of EEGs and collective self-consumption configurations. Here too, there is a time limit until June 30, 2026 and a total capacity of at least 2 GW and an indicative production of at least 2,500 GWh/year.

Of particular interest is the possibility of asking the GSE for a preliminary verification of eligibility („Verifica Preliminare di Ammissibilità”) of projects in accordance with the provisions of the decree: this voluntary verification is not a necessary condition for access to the subsidy tariffs or to the cost subsidy, but an effective means of ensuring greater investment security for interested parties, who can obtain a preliminary opinion within 60 days on whether or not the project can receive the subsidy.

Finally, it should be noted that the decree also allows access to the support tariffs for RES located in the territory of EU Member States or non-EU countries bordering Italy with which the EU has concluded a free trade agreement. However, this requires a specific agreement with the Member State or neighboring country that establishes a system of reciprocity and the conditions for proving the physical import or statistical transfer of the electricity generated from renewable energy sources.