The Superbonus was supposed to change the face of Italy, but in the end it screwed up public accounts. With the allocated appropriation, more than 5 million photovoltaic systems will be installed, increasing the share of renewable energy produced in our country beyond imagination. Instead, the Superbonus cost significantly more than expected and provided minimal benefits, worsening the government deficit. Meanwhile, solar power is growing in Italy, but not as much as it could be due to excessive bureaucracy and slow response from politicians. Resources can be used better, as with photovoltaics in the recent past: the benefits will be significant for a variety of reasons.
slowly renewable Italy
According to the latest data provided by Terna, Italy meets slightly more than 31 percent of its national energy needs thanks to renewable energies, but this rate has been decreasing for 9 years as can be seen in the chart below.
Solar energy contributes to the mix, about 9 percent of the total. It must be said that photovoltaics have grown recently, but not at the expected rate. The latest Solarpower report shows that the growth of installed power has been slow in the last 8 years, and comparison with other European countries makes Italy’s dimensions clear: in 2022, Italy ranks sixth in the European Union after Germany, Spain and Poland in terms of installed capacity. , Netherlands and France.
Italy has set a goal of bringing the share of renewable energy to 70 percent by 2030. To do this, new power plants of 65-70 Gigawatts (GW), mainly between solar and wind, will be needed, but even then growth is slow: the percentage of electricity produced by wind and solar in Italy is actually only 3 percent in the last 4 years. It increased. To clarify the order of magnitude, at the end of 2022 Italy reached an installed capacity of 25 GW, up from 9 more than a decade ago; this is the same increase that Germany achieved in just one year.
But as can be seen from the map, Italy’s exploitable potential is certainly greater than that of the Northern European countries due to its geographical location. In this sense, Superbonus funds could have left a different mark.
The black hole of Super Bonus and the irony of 110%.
The Superbonus cost more than expected and it’s a lot. Giovanni Spalletta, Director General of the Finance Department of the Ministry of Economy, at a hearing in the Chamber’s budget commission, measured the “unforeseen” cost of the measure: at more than 41 billion euros, the bonus fronts reach an “ironic” level, 110 percent more than budgeted spending, by lending more to the state. .
According to the latest data from Enea, the Superbonus exceeded 67 billion euros, one of the most significant expenditures in the history of the Italian public budget, but with modest benefits: +1.2 percentage points of GDP in 2021, +0.7 percent in 2022 last year and even in 2023. by one point less.
Equity issues are added to the modest economic effects: The super bonus does not really have an income cap and is used indiscriminately by the rich and the less wealthy: “The generosity of concessions to the wealthiest taxpayers,” the Parliamentary Budget Office wrote in a note on the measure, ‘dead weight’ for these taxpayers. ‘ – i.e. activities to be carried out even if there is no incentive – given efficiency as it is reasonably higher,” stressed.
Photovoltaic panels can be installed via Superbonus, but they do not constitute a “pusher” in the sense that they cannot activate the advantage on their own. In any case, in 2022 alone, 295 thousand plants were born, especially small power plants with an average of 6 KW specific to the residential sector, the vast majority of them concentrated in the Northern Italian regions as a result of the 110 percent Superbonus. But as we’ve seen, growth has been very slow given the enormous resources used. Also because of this, the Super Bonus seems like a missed opportunity.
A solar Superbonus: More than 5 million photovoltaic systems
Italy needs to increase its renewable energy installation to reduce greenhouse gas emissions and become independent of fossil energy sources: in fact, 50 percent of energy is still produced from gas. In this context, the European Commission has expressed its concerns about Italian energy plans, through the notorious Piano Mattei, between the limited progress in renewables and the government’s intentions on gas. Hence the recommendation to “reduce reliance on fossil fuels” and “facilitate authorization procedures to develop electricity interconnections to accelerate the generation of additional renewable energy and absorb it”.
Billions of Super Bonuses could be decisive for the resumption of photovoltaics in Italy. What could we do about it? The latest report by the Otovo study center, based on data from Terna’s Gaudì platform, revealed that the average price of a photovoltaic system is around 12,600 euros; this is a reduction as there is no longer any credit allocation on the bill: the cost of the Superbonus has exceeded 67 billion euros, that with the same amount we can install 5.3 million photovoltaic systems. It should be noted that there are around 1.2 million active in Italy.
In addition to increasing concessions, there is a need to modernize the authorization bureaucracy, especially for larger installations, as highlighted in the International Energy Agency’s (IEA) latest report on Italy.
And because some systems already need to be replaced: research by Milan Polytechnic calculates that without maintenance interventions, photovoltaic systems installed between 2010 and 2013 produced 6.2 to 8.5 percent less than when they were installed. As a result, some of the new capacity installed each year goes towards offsetting losses associated with plant obsolescence rather than increasing Italy’s overall capacity.
The parallel with the costs of the super bonus is a provocation: if there were a bonus of this size for solar, we would have the same critical problems, including an overall increase in raw material and labor prices. But following the successful example of past subsidies, a better use of resources is possible with significant advantages for the country: Italy will reduce its dependence on fossil fuels and lower the price of electricity through increased use of photovoltaic and other renewable energies. currently among the highest in Europe. An example.
As can be seen in Staffetta Quotidiana’s tweet, the price of electricity fell close to zero in the two days of May 2023, thanks to reduced demand from the grid and maximum wind and solar power supply. But this phenomenon is still marginal because the market price is determined by the most used resource, gas. The more renewable energy there is, the better for everyone: the government can help change the situation.
Remaining bonuses for photovoltaic systems
In the absence of the Superbonus, which is now liquidated by the Meloni government, the restructuring bonus allows the purchase of a photovoltaic system with the possibility of deducting 50 percent of the costs for installation from the tax return. Deductible expenses include purchasing supplies and paying professionals. The total deduction is spread over ten years for a maximum ceiling of 96 thousand euros: this means that it is possible to deduct one-tenth of the total deduction from one’s income each year. Example: If a facility costs 10,000 Euros, a total of 5,000 Euros per ten years, ie 500 Euros per year can be deducted.
In addition, a 10% discount VAT is applied to the photovoltaic system purchased by private individuals, making investment even easier. However, before the last bonuses, there were incentives like “Conto Energia” that really stimulated the photovoltaic race in Italy, but since 6.7 billion available funds were exhausted in July 2013, Italian solar stopped working: five years – from 2008 to 2013′ up to – 18.1 GW installed, with no incentives in the next nine years but only 7. And some utilities need to be replaced already.
The IEA report also highlights the need to introduce new incentives for renewable energy sources, in addition to strengthening existing incentives. Negative examples such as the super bonus and positive examples such as the energy bill help us understand how to intervene with the right stimuli without repeating the mistakes made.
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Source: Today IT
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.