Italy Increases Tax Incentives for EU-Made Solar Modules to Accelerate Renewable Energy Transition

The Italian government has boosted incentives for photovoltaic (PV) projects utilizing EU-made solar modules under its Transizione 5.0 Tax Credit scheme. Aimed at promoting the transition to renewable energy in industrial processes, the scheme offers fiscal credits covering up to 35% of the cost of solar modules through tenders.

The new rules enhance tax credit calculations for high-efficiency solar modules. Cells with at least 23.5% efficiency now qualify for a tax credit base rising from 120% to 140%, while modules with bifacial silicon heterojunction or tandem cells at 24% efficiency or higher will see their basis increase from 140% to 150%. A 130% fiscal incentive will apply to modules with at least 21.5% efficiency.

Investment brackets have also been simplified, now divided into two categories: up to €10 million ($10.2 million) and €10 million to €50 million. However, the updated policy removes the previous 20% to 25% additional tax credit for projects that reduce energy consumption by 6% to 15%.

The new provisions also allow for tax credits to be combined with incentives for investments in Southern Italy’s Special Economic Zones and Simplified Logistics Zones, as well as other EU-funded programs, as long as there is no overlap in cost coverage.