Italy is the third largest solar power producer in Europe after Germany and Spain, and due to the many attractive incentives that are available to the consumer market it is forecast that the sector will increase in volume and reach the targets that have been set by the government.

One of the main barriers to enter the solar energy market in Italy was always considered to be the costs involved but the availability of tax relief and incentives have encouraged the user base to increase considerably.

It is widely considered that whilst Italy's solar power targets are highly ambitious they are also extremely realistic.

The main incentive scheme revolves around the feed-in tariff which offers a guarantee of up to .49 Euros per kilowatt hour over a period of twenty years. Those kind of figures are so favourable that investors from a variety of institutions are looking at solar power energy in Italy as an extremely safe investment.

Because of the sunny climate, the pay back time is usually far shorter than many other parts of Europe where the climate is not so attractive such as the UK and Germany.

A further optimistic sign for the Solar industry in Italy is that due to the current economic climate many institutions have drastically cut back on their lending but this is not the case in the solar industry as the feed-in tariffs that are available and the contract that goes with it is seen as a bankable contract.

An example of these figures is that the return on a Feed-in tariff yields from 4.5% in the North of the country up to 10% in the south. If that is compared with a government Treasury bond returning a gross figure of 5.8% it van be seen why the solar option is an attractive one.

More information regarding the various incentives offered by the Italian government can be found at http://www.grtn.it/ita/fotovoltaico/IncentivazioneEnergiaFotovoltaica.asp

An important consideration for all governments in Europe is when will they be in a position to reach Grid parity. This is the price that solar power becomes competitively priced compared with traditionally produced electricity. It is predicted that Italy will reach grid parity ahead of any of the other European countries.

In 2009 the installed capacity of solar energy in Italy went over 600MW and was on target to reach 900MW with the installation of over 5 million square feet of solar panels, this represents an impressive increase of 66% since 2007.