Budget measure allocates funds for hydropower, photovoltaics, and building energy efficiency

The 2027 budget law allocates substantial funding for the energy sector between 2027 and 2030. From 800 million euros for hydropower to 1.2 billion euros for new photovoltaic installations, and including 1.6 billion euros dedicated to the energy efficiency of public buildings and 700 million euros for biomethane, the 2027 budget measures are set to distribute resources to strengthen renewable energy production and contain consumption. Additionally, support measures are planned to help cover electricity bill costs for energy-intensive companies and non-energy-intensive small and medium-sized enterprises.

Article 78 of the draft budget measures addresses hydropower plants. It allocates 200 million euros in 2028 and 300 million euros annually in 2029 and 2030 for the maintenance, recovery, and functionality of hydropower reservoirs (800 million euros in total). It also provides for two-way contracts for difference with the GSE, with a twenty-year duration, covering a share between 50% and 80% of the energy produced by existing plants. The resources derived from the valorization of this energy will be dedicated to reducing the general costs of the electricity system.

Article 79, on the other hand, provides for an investment of 1.2 billion euros (800 million euros in 2028, 200 million euros in 2029 and 2030) aimed at granting non-repayable grants of up to 40% of eligible costs for the installation of new photovoltaic plants with a capacity not exceeding 1 MW. Beneficiaries must access the support mechanism provided for by the ministerial decree of June 18, 2026. An implementing decree will be necessary to define in detail the conditions for the use of the funds.

Article 80 concerns the energy efficiency of public buildings, allocating 1.6 billion euros for the 2028-2030 period for this purpose. The funds will be distributed as follows: 600 million euros for hospitals and public healthcare facilities; 650 million euros for schools; 130 million euros for universities; 15 million euros for Afam institutions; 55 million euros for public research institutions, and 150 million euros for swimming pools and ice sports facilities. The interventions must ensure a reduction of at least 30% in primary energy demand. Here as well, a ministerial decree containing all the specifications is awaited (within 90 days of the entry into force of the budget measure).

Article 81 addresses biomethane, providing two support mechanisms aimed at the conversion of existing facilities, their capacity expansion, or the construction of new ones. Operational incentives funded by gas tariff components are planned, along with non-repayable grants covering up to 40% of the expenditure. A total allocation of 700 million euros over three years is set aside for these grants.

Articles 82 and 83 aim to support businesses in paying their energy bills. The former concerns energy-intensive companies, which may benefit from a temporary aid system covering up to 50% of the average wholesale price, applicable to no more than 50% of annual consumption. The resources allocated amount to 2.5 billion euros for the 2028-2030 period. Similar aid is provided for non-energy-intensive small and medium-sized enterprises, with 3.53 billion euros allocated for the 2027-2030 period. In both cases, companies must invest in additional green transition projects with resources at least equivalent to the aid received. The effectiveness of these measures is subject to approval by the European Commission.

Finally, at least two tax measures related to the energy sector are included. The first (Article 21) increases the Irap tax rate by five percentage points in 2027 and by three percentage points in 2028 and 2029 for companies identified by the Ateco codes in Annex 2: oil, gas, electricity production and distribution, and related activities. It is expressly prohibited to pass the increased tax burden on to customers through prices or tariffs. Article 19, on the other hand, amends the tax deduction regime in the sector. Specifically, it changes the tax treatment of advertising expenses and similar services for certain energy operators: deductions are made in equal installments over the year of expenditure and the following two years.

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