The agovoltaic incentive decree

Introduction

The above Decree (“MASE Decree”), approved by the EU Commission on November 10, 2023, is intended to regulate incentives for Agrovoltaic Plants (“AV”). Its entry into force, provided for in Article 1 of the MASE Decree, will establish incentive criteria consistent with the PNRR measures, offering capital grants and incentive tariffs.

Incentive Mechanisms

Article 1 (para. 2) of the MASE Decree proposes incentives for AVs that meet the requirements of the Decree itseld, including a capital grant of up to 40 percent of costs and an incentive tariff based on net electricity production fed into the grid.

Construction Requirements and Monitoring

The MASE Decree, in Article 5, establishes access requirements, requiring compliance with Annex 2 and continuity of agricultural activity underlying the installation. The precision of the requirements and consideration of monitoring systems are the subject of attention, and the final definition may come from the GSE’s operating instructions (“Operating Rules”).

The requirements set forth by in Annex 2 are:

• the minimum area devoted to agricultural activity (≥ 70% of the total area of the agrovoltaic system);
• minimum height of the modules above the ground (1.3 meters for livestock activity, 2.1 meters for crop activity);
• electrical output of the system must be ≥ 60% of the producibility of a standard system.

Operating Rules and Access to Incentives

The MASE Decree, in Article 12, provides for the approval of Operating Rules within 15 days of its entry into force. These rules will govern the size and construction of facilities and monitoring systems.

Tariffa Incentivante e soggetti beneficiari

Annex 1 of the MASE Decree establishes reference rates for AVs with an increase for those in Central and Northern Regions.

The following entities are eligible for the incentives:

• agricultural entrepreneurs as defined in Article 2135[1] of the Italian Civil Code, in individual or corporate form, including cooperatives, agricultural companies, consortia and temporary associations of agricultural enterprises (“Subject A”); or
• temporary associations of enterprises, which include at least one Subject A (“Subject B”).

Plants that meet the access requirements can benefit from the incentive tariff through registration in the registers (only Subject A with power ≤ 1 MW) or participation in competitive procedures (both Subject A and Subject B with any power).

Annex 1 defines the reference tariffs (“Reference TI”):

• 93 Euro/MWh for plants with a capacity (P) between 1 kW and 300 kW (1 < P ≤ 300) and
• 85 Euro/MWh for plants with a power (P) greater than 300 kW (P>300)[2].

Regarding access to competitive procedures, participants will have to offer in the application for participation a percentage reduction of the Reference TI of at least (≥) 2% (“Expectant TI”). Regarding the application for registration in the registers this percentage reduction of the Reference TI will not apply[3].

Finally, on the nature of the TI, Article 10 of the MASE Decree specifies that for Advanced AV Plants[4] or PNRRs[5] of power not exceeding (≤) 200 kW, the TI takes the form of an all-inclusive tariff and the GSE directly provides for the withdrawal and sale of the energy produced[6]. While, in the case of plants of more than 200 kW, the TI is a premium and the energy produced by the plant remains the property of the producer (see Art. 10, para. 1, letter a).

However, one more step is still needed in order to define how to calculate the TI that will actually be disbursed by the GSE (“Erogated TI”). Therefore, several assumptions can be identified:

1. in the case of Advanced AV Plant or PNRR registered and of power (P) ≤ 200 kW, the Erogated TI will be all-inclusive in nature and will be equal to the Reference TI;
2. in the case of Advanced AV Plant or PNRR enrolled in the registries and with power capacity 200 kW < (P) ≤ 1 MW, the Erogated TI will be in the nature of a premium tariff and will be equal to the difference between the Reference TI and the market price of reference electricity;
3. in the case of Advanced AV Plant or PNRR in a useful position following participation in the competitive procedures referred to in Article 6 of the MASE Decree and with a power (P) ≤ 200 kW, the Erogated TI will have an all-inclusive nature and will be equal to the Expected TI; finally
4. in the case of Advanced AV Plant or PNRR in a useful position as a result of participation in the competitive procedures referred to in Article 6 of the MASE Decree and power (P) > 200 kW, the Erogated TI will be in the nature of a premium tariff and will be equal to the difference between the Expectant TI and the market price of reference electricity.

In case the Erogated TI is a premium tariff, the producer remains the owner of the energy produced and will be able to value it in the market, while in case the Erogated TI is an all-inclusive tariff then the GSE directly provides for the withdrawal and sale of the energy. Finally, in case the TI is premium in nature and, therefore, the Erogated TI is calculated as the difference between the Reference TI (or the Expected TI) and the market price of energy, in the case of positive difference, then the GSE disburses the incentives with respect to the production of energy fed into the grid. Otherwise, in the case of a negative difference, the GSE will equalize or claim the corresponding amounts from the incumbent (see Article 10, Paragraph 1(b)).

Capital Contribution 

Eligible expenses, specified in Annex 3, must be paid by bank transfer with receipt by June 30, 2026. The maximum contribution is specified according to the power of the installation, specifically:

• 1,700 Euro/kWh for PNRR AV Plants with a power (P) between 1 kW and 300 kW (1 < P ≤ 300);
• 1,500 Euro/kWh for PNRR AV Installations with a power (P) greater than 300 kW (P > 300).

Temporary Enterprises Association and Participation in Procedures

The MASE Decree provides for the temporary enterprises association (“ATI”) of Legislative Decree 36/2023, defining ATI as essential for AVs. The application of ATI in the agrovoltaic context is discussed, highlighting the freedom of legal form and the possibility of participating as “in the process of being established” (costituende).

This article is for information purposes only and is not, and cannot be intended as, a professional opinion on the topics dealt with. For any further information please contact Piero Francesco Viganò, Ernesto Rossi Scarpa Gregorj e Stefano Biraghi.

[1] Article 2135 of the Italian Civil Code states, “1. An agricultural entrepreneur is one who engages in one of the following activities: cultivation of the land, silviculture, animal husbandry and related activities. 2. Cultivation of the land, silviculture and animal husbandry shall mean activities directed to the care and development of a biological cycle or a necessary stage of the cycle, of a plant or animal nature, which use or may use the land, forest or fresh, brackish or sea water. 3. In any case, activities, carried out by the same farmer, directed to the handling, preservation, processing, marketing and exploitation that have as their object products obtained predominantly from the cultivation of the fund or forest or from the rearing of animals, as well as activities directed to the provision of goods or services through the prevailing use of equipment or resources of the farm normally used in the agricultural activity exercised, including activities of enhancement of the territory and rural and forest heritage, or reception and hospitality as defined by law, are considered related”.

[2] Annex 1 of the MASE Decree does not clearly indicate whether the power output of the plants has MWh or kWh as the unit of measurement; however, given the ranges provided in the MASE Decree and just outlined, it seems more reasonable to support kWh as the reference unit of measurement.

[3] See Art. 6, para. 3 MASE Decree.

[4] Plants that meets the requirements of A, B, C and D of the June 2022 Guidelines.

[5] Facility that meets the requirements of A, B, C, D and E of the June 2022 Guidelines.

[6] However, the producing entity may apply for the scheme related to plants with a power exceeding (>) 200 kW.