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Italy: Solar Energy Cheapest Energy-saving Measure in Tax Deduction Scheme


\ENEA, the Italian National Agency for New Technologies, Energy and Sustainable Economic Development, has recently published its fourth study analysing the effect of the 55 % tax deductions from 2010. According to these annual studies, the total investment in solar thermal systems under the tax deduction scheme more than tripled between 2007 and 2010, reaching EUR 194 million in 2010. The average cost of saving 1 MWh by a solar water heater was at EUR 69 (see the chart above), which was 2010 the best cost-benefit ratio in terms of fossil fuel savings.

The following table summarises other interesting information from the most recent study called “Le detrazioni fiscali del 55% per la riqualificazione energetica del patrimonio edilizio esistente” (55% tax deduction for energy retrofit of existing buildings).


Number of solar

thermal applications

Energy savings


Total investment


Deducted 55%





139 million

77 million




258 million

142 million




248 million

136 million




353 million

194 million

Effect of the 55 % tax deduction on solar water heating systems
Source: ENEA studies

Solar thermal made up 12% of all tax deduction applications. The most popular energy-saving measure was to replace a building’s windows. The total investment in solar thermal technology in the boom year 2010 added up to EUR 353 million. Analysing the data published in the report produced an estimate of, all in all, 263,000 m² (54 %) of collector area which were installed under the tax deduction scheme in 2010.

Between 2007 and 2010, the number of applications increased by 135%. At first glance, it is an interesting increase, which, however, is not as strong as the overall growth of other energy-saving measures within the programme. According to the authors, the programme’s beneficiaries have, in fact, mostly chosen simpler and less expensive measures over the last years. For example, replacing a building’s windows grew to almost five times its original value between 2007 and 2010.

Average investment costs in 2010 were EUR 7,394, with savings of about 5 MWh/year. The authors calculated the average specific price of a solar thermal system with a flat plate collector to be 1,300 EUR/m² and a system with a vacuum tube collector was sold at 1,400 EUR/m², keeping in mind that flat plate collectors were the preferred technology in the market (76%).

Both absolute numbers and the number of tax deduction grants per 1,000 inhabitants point to greater usage of the incentive in the north. The regions which had the highest absolute numbers also had the highest numbers for the different types of tax deduction requests, including solar thermal. But if the square meters per 1,000 inhabitants are taken into account, the three regions which have benefited the most from the mechanism were Friuli Venezia Giulia, Trentino-Alto Adige and Veneto: three northern regions, in which the culture of solar heating is more pronounced than in other areas of Italy.