Photovoltaics in the 2027 Budget Bill Text Transmitted to the Chamber

The 2027 budget bill introduces a capital grant of up to 40% of investment costs for new photovoltaic plants of up to 1 MW that access the FerX, with a budget of 1.2 billion euros for the 2028-2030 period and a 3 GW allocation. The text also provides for two support regimes for electricity costs for energy-intensive companies and SMEs, conditional on investments in renewables and storage systems, 1.6 billion euros for the energy retrofitting of public buildings, the confirmation for 2027 of the 36-50% tax deductions that also cover photovoltaic and solar thermal systems, and an increase in the Irap tax for companies in the energy sector, including electricity producers.

The bill (A.C. 3174), approved by the Council of Ministers on October 28, was presented to the Chamber of Deputies on October 30. It will now be examined by the Budget Committee, where amendments will be voted on, then by the full Chamber, and finally by the Senate. For the law to enter into force on January 1, 2027, it must be definitively approved by December 31. The energy measures are included in Title VI, Chapter I.

The contribution for photovoltaics

Article 79 authorizes the Energy Services Manager (GSE) to grant contributions to entities that access the mechanism established by the Mase decree of June 18, 2026, namely the definitive FerX, which for plants up to 1 MW provides direct access with a price set administratively. The measure is reserved for newly built plants and is subject to a dual limit: a financial cap of €800 million in 2028 and €200 million in each of the years 2029 and 2030, and a capacity limit of 3 GW. On average, the contribution is therefore worth approximately €400/kW. The criteria and procedures will be established by a subsequent Mase decree in coordination with the Ministry of Economy and Finance (MEF).

According to the technical report, the contribution advances a portion of the support and, based on the assumptions adopted for the FerX, can reduce the level of support required in the tariff by approximately 35%. The reduced need for incentives is estimated at approximately €89 million per year.

Aid to businesses linked to renewables and storage

Article 83 concerns micro, small, and medium-sized enterprises that are not energy-intensive and allocates €1 billion in 2027, €1.43 billion in 2028, €600 million in 2029, and €500 million in 2030. The aid covers up to 50% of the average wholesale price in the zone, applied to no more than 50% of the annual consumption for the 2028–2030 period, for both purchased and self-consumed energy. In return, the enterprise must allocate at least 100% of the aid to additional investments in renewable energy self-generation facilities, storage systems, efficiency measures, process electrification, heat pumps, and heat recovery. Investments must be initiated after the application and completed within 36 months.

Article 82 applies the same framework to energy-intensive companies, with a budget of €1 billion in 2028, €800 million in 2029, and €700 million in 2030. Eligible investments include the production or long-term procurement of renewable energy, including power purchase agreements (PPAs), as well as energy storage. Both regimes require approval from the European Commission and, starting in 2029, will be funded through system charges. Combining the provisions of Articles 79, 82, and 83, the levy on the renewable energy component of system charges reaches €1.6 billion in 2029 and €1.4 billion in 2030, although the text does not estimate the impact on electricity tariffs.

Public buildings and tax deductions

Article 80 allocates €600 million in 2028 and €500 million annually in 2029 and 2030, fully funded by the state budget, to contributions that cover 100% of the costs under the Thermal Account framework. Hospitals, schools, universities, Afam institutions, research bodies, swimming pools, and ice sports facilities are eligible to access these funds, provided they reduce primary energy demand by at least 30%.

Article 4 maintains the 36% tax deduction for 2027 expenditures, increased to 50% for primary residences, with a cap of €96,000 per real estate unit. Among the energy efficiency measures explicitly mentioned are solar thermal panels for hot water production. Photovoltaic systems and energy storage remain eligible for incentives as building renovation works, through a reference to the list in the consolidated text of income taxes.

Higher Irap for energy producers

Article 21 raises the Irap tax rate by 5 percentage points in 2027 and by 3 percentage points in 2028 and 2029 for companies whose main activities fall under the Ateco codes listed in Annex 2, which includes code 35.1, “Production, transmission and distribution of electricity.” The levy therefore also applies to companies that generate energy from renewable sources. For 2027, this increase replaces the 2-point increase already provided for in Decree-Law 21/2026. The estimated revenue is €734 million in 2027, €882 million in 2028, and €906 million in 2029. Companies will not be allowed to pass the additional burden on to prices and tariffs.

The energy package also includes Article 78 on hydropower: €800 million over the 2028–2030 period for the operation of reservoirs and 20-year contracts for difference with the GSE covering 50–80% of the energy produced by existing plants, with the proceeds used to reduce general system costs.