Italy solar capacity seen hitting 2,500 MW in 2010

MILAN (Reuters) - Solar power installations in Italy are set to grow rapidly on the back of generous incentives to hit about 2,500 megawatts in 2010, a senior renewable energy expert said on Thursday.

Photovoltaic (PV) energy, which turns sunlight into power, got a boost in Italy last year when the government approved a set of incentives and requirements prompting energy and industrial companies to flock to the sector.

"Italy will enter the European solar troika," Gianni Silvestrini, scientific director of Italy's Kyoto Club, told Reuters on the sidelines of an energy conference.

"My evaluation of the cumulative installed capacity is 2,500 MW for 2010. It is a very high target compared to what's been done so far," Silvestrini said.

Italy's total PV installed capacity stood at 170 MW at the end of 2007.

But installations have been gathering speed quickly with 20 MW coming on stream in August alone, Silvestrini said, forecasting 600 MW of new installations in 2009 and another 1,500 MW in 2010.

"There will be a rush here as was in Spain when they have done 1,000 MW (of new installations) this year because incentives were to expire in September," he said.

Sector experts were more cautious with forecasts of Italian PV growth at an industry conference in Spain this month.

The Italian government body GSE has forecast no more than 450 MW of new solar power installed in Italy by the end of next year and saw a 1,200 MW cap on Italian subsidies probably reached in 2012.

But Silvestrini said an expected fall of solar panel prices would bring closer the so-called "grid parity" -- when the cost of solar electricity matches that of the traditional power from the grid -- and make incentives unnecessary.

"Once grid parity is achieved, incentives practically will no longer be needed. It will be even cheaper to produce solar energy than traditional. At this point there will be a market boom," Silvestrini said.

He cited industry forecasts that grid parity in Italy may be reached in 2010-2015.

Rapidly growing PV power generation demand has triggered a great number of projects to produce panels in Italy which would come on stream in the next two to three years, he added.