MILAN (Reuters) - Sunny Italy expects to more than double its installed photovoltaic capacity used to turn sunlight into power to 900 megawatt (MW) by the end of 2009 on the back of government incentives, state-run agency GSE said on Friday.

Italy saw 338 MW of photovoltaic (PV) capacity installed in 2008 alone, the third-biggest annual rise in PV capacity in the world, on a par with the United States and behind Spain and Germany, the power management agency said in a statement.

Italy’s PV market got a boost after the government approved new incentives for the sector in 2007. The incentives, considered by experts among the most generous in Europe, lured investors ranging from families to sports car maker Ferrari.

As of April 1, about 34,000 new PV installations with a total capacity of 435 MW had started up in Italy after the new incentives kicked in in mid-2007, GSE said in an update of the country’s PV capacity.

That compared to about 2,500 PV installations with a total capacity of 22 MW which were launched over about 2 years after the first incentive scheme was introduced in 2005, according to GSE data.

“If the requests for incentives (which follow the installation of modules) continued at the current pace, the number of installations operating in Italy could exceed 70,000 by the end of 2009 with a total capacity of 900 MW,” GSE said.

GSE’s forecast is more ambitious than that of the Italian PV industry group GIFI which last month estimated the total installed PV capacity in Italy would rise to 600-650 MW by the end of this year.

Italy’s total PV installed capacity stood at about 440 MW at the end of 2008, according to GSE data.

As of April 1, Italy’s southern region of Puglia had the biggest installed capacity, of 56.5 MW, while the northern region of Lombardy had 5,372 installations, the largest number in the country, GSE data showed.