Introduction
Agrovoltaics is gaining ground in Italy and consists of the integrated use of photovoltaic modules on agricultural crops. The main objective of agrovoltaics is to both satisfy the energy demands of farmers, for powering farm equipment, and the production of electricity. In fact, agrovoltaics allows the agricultural producer to increase his profits, thanks to savings on energy costs and the possibility of exploiting tax incentives that can support the initial investment. Since the introduction of the first photovoltaic system for agricultural purposes in 2009, Italy has played an active role in the development of agrovoltaics. The government has promoted the spread of environmental policies and tax incentives to encourage the diffusion of technology.
From 2009 to today, there have been significant evolutions in terms of agrovoltaic technology, with the introduction of new innovative solutions that are helping to improve the efficiency of these systems. The challenges of agrovoltaics are mainly related to the initial costs associated with the installation of photovoltaic systems. These costs can be reduced thanks to financing and subsidies, but also through tax incentives that can support the initial investment.
Benefits of agrovoltaics
Agrovoltaics is a form of renewable energy that offers many economic and environmental benefits. First of all, it can help significantly reduce pollution and is a way for farms to produce clean energy to power their operations. Furthermore, it can help you save money in the long run thanks to the low maintenance costs and energy efficiency it offers.
Renewable energy is an inexhaustible resource that can be produced efficiently and environmentally friendly and is cheaper than traditional energy sources such as oil and coal. This means that farms can use it sustainably without sacrificing air or environmental quality.
Additionally, agrovoltaics can be used as a way to increase profits. Thanks to the Italian law which provides tax incentives for the installation of photovoltaic systems, many agricultural producers can benefit from incentives on energy production. Furthermore, the renewable energy produced by these plants can be sold to other users, which helps increase the profits of agricultural companies.
Finally, agrovoltaics can be a means of contributing to environmental sustainability. The renewable energy produced by these plants can replace energy from non-renewable sources such as oil and coal, thus helping to reduce greenhouse gas emissions into the atmosphere. With agrovoltaics, agricultural companies can contribute to achieving sustainable development objectives in their territory.
Challenges
The main challenges associated with agrovoltaics in Italy are the initial costs associated with installing photovoltaic systems, obtaining financing and incentives, and how long it will take to recover the costs.
The initial costs of agrovoltaics can be quite high. To install a solar power system, you need to purchase or rent suitable agricultural land, purchase a set of components for the system, and pay for the installation. Furthermore, the maintenance of an agrovoltaic system requires specialized skills.
Getting financing can also be a challenge. Most banks and insurance companies do not yet offer specific financing for agrovoltaics, which means that agricultural producers must look for other means of financing or rely on government incentives.
Finally, recovering initial costs can take time. Agricultural producers can profit from agrovoltaics thanks to the energy produced, from sales and from the reduction of energy bills. However, you may have to wait several years before your initial investment begins to produce a return.
Laws and incentives
The National Recovery and Resilience Plan (PNRR) provides 1.1 billion euros aimed at the development of agrovoltaics, with the aim of installing at least 1.04 GW of agrovoltaic systems by 30 June 2026.
There are many resources available for agrovoltaic incentives. The program provides for the provision of financing at subsidized rates. These loans can be used to cover up to 70% of the system installation costs and up to 40% of the system management costs. Monetary incentives are also available for the purchase of construction materials and specialized equipment.
The program also provides a series of guidelines for the application of agrovoltaic incentives. Farmland owners must submit an application to gain access to the incentive program. Applications must be accompanied by specific documentation, including technical documentation relating to the facility, a cost estimate and a detailed description of the facility. Projects must also meet the eligibility requirements of the programme:
• Requirement A: the system promotes the integration between agricultural activity and energy production and enhances the production potential of both systems;
• Requirement B: during its operation, the agrovoltaic system must be managed in such a way as to allow the simultaneous and coherent production of electricity and agricultural products;
• Requirement C: the system must use innovative integrated solutions;
• Requirement D: the system must be equipped with a monitoring system to evaluate the impact on crops, water saving, agricultural productivity for different types of crops
• Requirement E: the plant must be equipped with a monitoring system which, in addition to satisfying requirement D, allows the evaluation of factors such as the recovery of soil fertility, the microclimate and the ability to adapt to climate changes
The program requires incentive payments to be made within six months of the application submission date. Incentives are paid based on a minimum and maximum threshold.
The incentive provides a cash percentage of 20% of the initial investment, up to a maximum of 5 million euros, paid in the form of a grant. The loan is granted in the form of reimbursement on real costs incurred over two years and must be used for the construction of an electricity production plant from renewable sources.
To access the incentive program, it is necessary that the surface area of the land on which the plant will be installed is at least equal to the surface area of the plant, and that the land is owned by the company benefiting from the incentive. The system must be designed and built in compliance with the safety and regulatory requirements set out in the Italian renewable energy code.
Businesses that qualify for the incentive must submit a funding application, including a detailed spending plan, and documentation to demonstrate they meet the eligibility criteria.
The incentive thresholds envisaged by the Agrovoltaico Italia 2023 incentive program range from a minimum of 500 thousand euros to a maximum of 5 million euros.