A better future for the Italian solar market

Energy Alert

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The rules for the management of the maintenance and technological renovation interventions on photovoltaic plants incentivized under the energy accounts (conti energia) have been published by the Gestore dei Servizi Energetici S.p.A. (GSE) on 21 February 2017. In accordance with article 30 of Ministerial Decree 23 June 2016, the adopted document contains the rules to be followed in case of maintenance and technological renovation interventions carried out on photovoltaic plants and its scope is the reduction and simplification of the necessary formalities and, at the same time, the maximization of the energy production from photovoltaic source, encouraging the spreading of "good practices" to be adopted in case of performance of such interventions.

The Rules aim at ensuring that the such interventions are made without negatively impacting the permanence of the requirements on the basis of which the plant was granted the incentives, avoiding that the GSE, within the scope of its inspection and supervisory activities, may declare the revocation or re-modulation of such incentives.

As explained below, the Rules introduce a set of formalities ancillary to the operation and maintenance interventions, to be necessarily taken into account - to the extent necessary, with an amendment to the existing O&M contracts - since such activities are generally autonomously performed by the O&M contractors and the violation of the Rules may cause the revocation or re-modulation of the incentives.

In addition, it may be appropriate to evaluate if the terms and conditions of the financing agreements currently in force need to be amended in order to either impose the compliance with the Rules or take into account the additional costs and charges deriving from the compliance with such Rules.

Scope of application

The Rules are applicable to the following interventions:

  • Maintenance activities, defined as the technical activities aimed at maintaining or restoring the functionality and efficiency of the plant, further subdivided into:
    • Ordinary maintenance activities, defined as the activities aimed at maintaining the energy performance provided in the original engineering and commissioning phases and at remedying to accidental events, without modifying the essential structure of the plant
    • Extraordinary maintenance activities, defined as the activities aimed at replacing any components with others having different characteristics
  • Technological renovation interventions, defined as the activities aimed at remedying the degradation of the components or any inadequate designing choices in order to recover the hypothetical expected performance of the plant
  • In case of plants integrated or installed on buildings, interventions on such buildings aimed at recovering or optimizing the relevant performance and economic value

The Rules apply to any plants, except for the following:

  • Plants having a capacity equal to or lower than 3 kW, which are exempted from the pre-notification obligation, without prejudice to the obligation to ensure that the interventions are carried out in accordance to the provisions of the relevant Energy Account and to other applicable regulatory provisions. The only obligation applicable to such plants is the obligation to notify any replacement of modules interventions in accordance with the RAEE provisions (i.e., the disposal of electrical and electronic equipment waste), the performance of non-incentivized upgrades and the installation of any storage systems.
  • Plants having a capacity between 3 and 20 kW, to which a simplified procedure applies.

Rules and criteria

The GSE has provided for different procedures depending on the substantiality of the interventions to be performed.

Substantial interventions:

Are those entailing a variation of substantial characteristics or configurations of the plant.

The person in charge shall notify the GSE of any substantial interventions within 60 days from the completion of the same, enclosing documents describing the works performed. Appendix A to the Rules describes the documentation to be enclosed in relation to each type of intervention.

Should the GSE, in the course of its preliminary evaluation, underline any insufficiencies in the documentation or potential adverse effects on the maintenance of the incentives, it will start a proceeding according to Law no. 241/90, to be completed within 90 days, aimed at demonstrating, together with the person in charge of the plant, the permanency of all the requirements that allowed the acknowledgement of incentives and premiums or bonuses, if any.

In case of a positive outcome of the evaluation, the GSE will update the plant data.

In case of lack of notification, the GSE may be prevented from demonstrating and confirming the existence or the maintenance of the requirements necessary for being granted with, or maintaining, the relevant incentives, with the consequent re-quantification or revocation of the incentives.

The Rules identify specific criteria to be followed by the persons in charge with respect to the various types of substantial interventions:

  • The transfer of the plant from the original site: the prohibition to dismantle a plant in order to reassembly it elsewhere is confirmed. It is however allowed to deliver to the GSE a preliminary evaluation request in case the need of transferring the plant derives from force majeure events, unforeseeable events or other events not depending on the person in charge.
  • The displacement of components within the same site: It is allowed to displace any main components - such as solar modules . in order, for instance, to maximize the performance of the plant mitigating the shading effects caused by new buildings or to enhance the economic value of the assets on which the plant is installed.
  • The replacement of main components (modules and inverters):
    • In case of any replacements, the modules installed must be new or regenerated and compliant with the requirements of the Fifth Energy Account.

      In such regard, the GSE has recently confirmed that all the operators currently active on the market would be able to deliver both the product and system certifications required by the Fifth Energy Account.

      With reference to the inverters, since it may be more difficult to find components with the certifications required by the Fifth Energy Account, especially in case such components are integrated with energy storage systems, the Rules only require the compliance with the provisions of the Italian Electro-Technical Committee (CEI) and the relevant resolutions of the Italian Regulatory Authority for Electricity Gas and Water (AEEGSI).
    • Modules forming part of spare parts stocks (i.e., purchased in advance) - should be at least compliant with the requirements of the relevant Energy Account and evidence of the purchase date and, when purchased from third parties, also of the original allocation to the plant under replacement intervention, is provided.
    • The above is without prejudice to the prohibition of the usage of components previously installed on other plants incentivized under any of the Energy Accounts.
    • In case the responsible person decides to re-use on the same plant any functioning modules removed during an intervention, it shall notify the GSE, following the removal intervention, of the intention to maintain such modules up to the next usage specifying also the storage area.
    • In case of replacement of modules, for the purpose of facilitating the reconfiguration of the pv strings which is necessary in order to ensure the appropriate operation of the inverter, the Rules allow the increase of the nominal power of the plant up to 5%, in case of plants up to 20 kW, and up to 1%, in case of plants exceeding such threshold, to be interpreted as maximum threshold permitted for any and all upgrades performed during the entire incentivizing period.

      The Rules allow also the performance of so-called repowering interventions, procuring an increase of the nominal power of the plant also exceeding the above mentioned thresholds. Such excess is not incentivized.

      In the first case, the higher capacity will benefit of the same incentive granted to the plant, whilst in the second case the capacity exceeding the threshold will not benefit of any incentives (but the relevant energy may be sold through the dedicated withdrawal "ritiro dedicato" regime).

      The non-incentivized upgrades are encouraged by the GSE, and are permitted provided that the plant is equipped with devices enabling the quantification of the exact amount of energy produced by the non-incentivized portion of the plant.
    • In case of straightforward restoration interventions due to extensive damages (such as fire), it is briefly allowed to install temporary spare parts - also in the availability of third parties - for a maximum period of up to 6 months, provided that they meet the same requirements of the replaced components, do not entail any power upgrade and that the relevant replacement with new components, once performed, is notified to the GSE.
    • In any case of any replacements, the person in charge shall notify the GSE of the final destination of the removed components (disposal, delivery to the producer, storage, sale to third parties, theft or destruction), also in order to ensure full compliance with the provisions of applicable law concerning the disposal of photovoltaic modules.
    • In case of replacement of components which - due to the fact that they are produced in any country of the European Union and/or of the European Economic Area Agreement - have contributed to the obtainment of the relevant bonuses provided for by the Fourth or the Fifth Energy Accounts, such new components shall meet the same requirements.
  • Removal of main components: the removal of modules due to damages or other technical causes is always permitted and entail the temporary, or definitive in case the person in charge waives it, reduction of the nominal power of the plant. In such second case, the person in charge shall send a specific communication to the GSE.
  • Interventions for the modification of the building where the plant is installed: in case of failure to meet the original requirements once the intervention is completed, a different classification of the plant may be determined, entailing a re-modulation or a revocation of the incentive. On the contrary, it is not possible to obtain an increase of the incentive already granted to the plant.
  • The variation of the POD code identifying the connection point of the plant to the grid: the connection point shall remain exclusive and not shared with other plants during the whole incentive period, under penalty of revocation of the incentive for all the plants sharing a connection point. It is however abstractly possible to change the POD in order to make the plant configuration more efficient.
  • Installation of storage systems: the Rules refer to the principles stated in the resolution no. 574/2014/E/EEL of the Italian Regulatory Authority for Electricity Gas and Water (AEEGSI) and in the technical rules for the implementation of the provisions related to the integration of energy storage systems on national grid issued with the GSE resolution 574/2014/E/EEL.

Non-significant interventions:

Are those interventions which do not entail the variation of relevant characteristics or configuration of the plant, therefore not affecting the maintenance of the incentives, including, inter alia, the displacement of inverters and other minor electrical components; the replacement, removal or new installation of minor electrical components provided that such interventions do not entail any variations of the grid assignment regime; interventions performed on the support structures of the modules or on the buildings where the plant is installed provided that such interventions do not entail any variations of the requirements based on which the plant has been incentivized.

In such cases, the person in charge shall notify the completion of the performance of the intervention, without the need to enclose any documents.

A third hypothesis consists in the possibility to deliver to the GSE a preliminary technical evaluation request aimed at predetermining the possible effects on the originally granted incentives of interventions to be performed in case of: (i) supervened public interest, force majeure events, extraordinary, exceptional or other events beyond the control of the owner of the plant; and (ii) integrated photovoltaic plants having innovative characteristics (Building Integrated Photovoltaic - BIPV), concentration photovoltaic systems (CPV) and photovoltaic plants paired with energy saving interventions in relation to which the relevant increase has been granted, since such installations adopt complex and technologically advanced and innovative solutions.

In such cases GSE will commence a proceeding to be concluded within 60 days with the delivery of a communication containing an evaluation of the possible consequences of the intervention.

The communication shall be delivered by means of registered letter or certified electronic mail (PEC), pending the activation by GSE of the relevant IT system.

Charges

Charges are applied in case of: (i) communications delivered with reference to maintenance and/or technological renovation interventions entailing a variation of relevant characteristics or of the configuration of the plant; or (ii) preliminary evaluation requests.

Such charges are equal to Euro 50.00 plus a variable amount equal to Euro 2.00 per each kW of incentivized power up to 20 kW and to Euro 1.00 per each KW of incentivized power exceeding the first 20 kW. In case of replacement of main components (modules and inverters), the consideration is based on the power of the replaced components.

The preceding rules issued in 2015

The Rules have been warmly welcomed by the operators and confirm the turnaround with respect to the previous document published by the GSE on May 2015 (named "Rules for the maintenance of the incentives in Energy Account") providing for more penalizing rules.

The previous document had been drafted in a period where the concerns regarding the level reached by the photovoltaic counter were alarming (the threshold for the annual costs of the incentives to the photovoltaic plants, equal to Euro 6.7 billion, had been reached in 2013) and mainly aimed at avoiding any increase of the due incentives.

It is worthy of note to underline that, due to the serious criticisms received by GSE, it decided to suspend the effectiveness of such document deferring to the new upcoming FER Decree the determination of a more commonly shared criteria. As of today the only applicable rules were those provided by the relevant applicable Energy Account.

Among the most criticized measures contained in the rules issued in 2015, it is worth mentioning (i) the introduction of a limit to the power increase based on a production criteria (and not on the nominal power), calculated as a percentage of the production of the relevant plant during the previous 3 years (or, if more recent, with reference to an envisaged production), thus penalizing such plants that, due to designing or maintenance issues, were producing less than what they were meant to; and (ii) the obligation to notify the GSE, with reference to any kind of interventions, both at the beginning and at the completion of such intervention.