The European Photovoltaic Industry Association (EPIA) on Monday issued a statement warning that new legislation approved by the Italian senate last month that retroactively cut once guaranteed solar feed-in tariffs (FiT) will not only damage the countrys PV industry but also the image of Europe as a region of stable investment.

Italys decree-law, adopted on August 7, introduces significant retroactive FiT cuts and new taxes for self-consumed electricity. The legislation retroactively modifies the way FiTs will be paid as of January 1 to existing PV installations. PV system owners, which were granted 20-year FiTs under the Conto Energia mechanism will now have to choose between three options that result in a cut of the previously guaranteed rates.

"This new Decree-Law is forcing Italian PV system owners to choose between bad and worse, said EPIA President Oliver Schäfer. Not only will it destabilize the once-flourishing Italian PV market, but it will also give a very bad signal to the entire Italian economy, showing that there is no more legal certainty for investors in the country in any economic sector."

While the text foresees a number of exemptions to these harmful retroactive measures, EPIA warns that these will not be enough to preserve a stable and predictable environment for investments.

According to the new law, self-consumed PV electricity will be subject to a 5% "general system charge" as of January 1. "Prosumers can provide flexibility to the energy system, contributing to the system management and avoiding costly grid extensions. But these new business models cannot be unlocked if new taxes and charges are being wrongly imposed," Schäfer added.

Legal experts have questioned the legality of the legislation while European solar developers, among them Dutch group Photon Energy and German company New Energy Projects, have loudly criticized the Italian government’s plans to cut FiT rates.

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