Financial Incentives to create a REC in Italy

To date, Italian regulation on collective self-consumption and ECs consists of article 42-bis, inserted in the Milleproroghe Decree (converted into the Law n. 8/2020 in February 29, 2020) which sign the starting point for an experimental phase of renewable energy communities (REC) in Italy

In accordance with the provisions of the “Milleproroghe” Decree , in collective energy schemes the participants must produce energy for their own consumption with new renewable energy facilities not exceeding 200 kWp. To share the energy produced, users must use existing distribution networks and use only virtual schemes of self-consumption.

The EC scheme will be applied only to users connected to the low voltage electricity network, under the same medium / low voltage transformer feeder. Participants retain their rights as end customers, including the choice of their supplier and the option to leave the community when they wish. Participation must also be open to all users connected to the same electrical feeder, in an attempt to include low-income or vulnerable families

ARERA state that in order to promote the use of storage systems and match between production and consumption, an incentive tariff has been established to remunerate the self-consumed energy instantly. To access the incentives, the system must be new (installed after 1st March 2020). The incentive rate will be cumulative with tax deductions, where available, and are equal to 100 €/MWh of shared energy in the case of COLLECTIVE SELF-CONSUMPTION scheme and 110 €/MWh of shared energy in the case of RENEWABLE ENERGY COMMUNITIES.
The energy shared within the scheme members is equal to the minimum, each hour, between the electricity produced and injected into the network by the community generation facility and the electricity withdrawn by all the associated members. Energy is considered shared for instantaneous self-consumption and also through storage systems. The incentives provided by the ARERA will be paid by GSE (Manager of the electricity services in Italy) for a duration of 20 years.

Furthermore, with the enactment of Legislative Decree No. 199 on November 8, 2021, Italy fully transposed the European Directive RED II (2018/2001) and EMD (2019/944 REDII), making them the main regulatory references for energy communities in the country. Additionally, Legislative Decree No. 210, also on November 8, 2021, implemented Directive 2019/944/EU on the internal electricity market and defined the concept of active customers, who can participate individually, collectively, or through energy communities and have the right to sell self-generated electricity on the market.

On December 27, 2022, ARERA Resolution 727/2022/R/eel approved the Integrated Text of Distributed Self-Consumption (TIAD), which incorporates the provisions of Legislative Decrees 199/21 and 210/21 regarding REC, collective energy communities, groups of renewable energy self-consumers acting collectively, groups of active customers acting collectively, individual remote self-consumers of renewable energy with direct connection, individual remote self-consumers of renewable energy using the distribution network, and remote active customers using the distribution network.

These new regulations open the door to larger-scale energy communities with facilities up to 1 MW. The REC scheme will also be extended to users connected to the high voltage electricity network, specifically under the same high/medium voltage transformer feeder. The incentives provided will vary by region and depend on the installed capacity of renewables. Detailed information on these aspects will be defined in the Mase Decree, which has submitted a draft decree to the European Union. In February 2023, the Ministry of Environment and Energy Security (Mase) sent the draft decree incentivizing energy communities to the European Union. The proposal is currently awaiting approval from the EU Commission, which may request necessary modifications if required.

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