Solar up to 1 MW, 40% subsidies in 2027 Budget

Small and medium-scale photovoltaic systems have been included in the 2027 budget law. Article 79 of the bill, approved by the Council of Ministers on October 28, 2026, authorizes the GSE to grant capital contributions of up to 40% of eligible investment costs for new photovoltaic plants with a capacity not exceeding 1 MW.

The allocation is €1.2 billion, distributed between 2028 and 2030, for a total capacity of 3 GW. The contribution is reserved for entities that access the FER X support mechanism, the decree issued by the Ministry of the Environment and Energy Security (MASE) on June 18, 2026, which incentivizes electricity generated from renewable sources with generation costs close to market competitiveness. The measure is not yet operational. The bill must pass parliamentary review, and an implementing decree will subsequently be required. However, the bill and the accompanying technical report already provide insight into how the contribution will function and what impact it will have on FER X incentives.

Grants for photovoltaic systems up to 1 MW: What Article 79 provides

Article 79 of the 2027 Budget Bill introduces a capital grant that intervenes at the investment stage, before the facility becomes operational.

The regulation sets few constraints, all contained in the first paragraph.

The 40% is a maximum cap. The actual amount, the definition of eligible costs, and the access procedures will be established by the implementing decree. The regulation does not identify other categories of beneficiaries or set priorities among different types of facilities.

Resources and funding, 1.2 billion between 2028 and 2030

The total allocation is 1.2 billion euros, funded through two distinct sources. For 2028, paragraph 2 authorizes an expenditure of 800 million euros, to be charged to the state budget, recorded in a line item of the MASE budget estimate, and subsequently transferred to the GSE.

For 2029 and 2030, 200 million euros per year are planned, covered by the component of the general system costs of the electricity system designated for the support of renewable energy sources. Therefore, one-third of the resources will be borne by electricity bills. The bill does not specify whether this share will require an increase in this component or its re-modulation.

When the resources are related to the target capacity, the average availability is approximately 400 euros per kW. FER X indicates a specific investment cost of 900 euros/kW for photovoltaics, a reference value that the decree uses to calculate the guarantees. On this basis, the maximum 40% contribution amounts to approximately 360 euros/kW and, when applied to 3 GW, to approximately 1.08 billion euros. This is an estimate by the editorial team: the actual contribution will depend on the eligible costs of each facility.

FER X and capital grant: how the incentive price changes

The contribution provided for in the 2027 Budget Law builds upon an option already foreseen by the FER X.

Article 15 of the Ministerial Decree of June 18, 2026, allows the production incentive to be combined with only one of the following measures:

Article 79 therefore funds the first option, limiting it to photovoltaic systems up to 1 MW. Those who choose the capital grant consequently waive the other two forms of combination. The same Article 15 recalls that access to the FER X is an alternative to net metering and dedicated withdrawal.

Combination incurs a cost on the tariff. Annex 1 of the decree applies a factor (1-F) to the awarded price, where F increases linearly from zero, in the absence of a contribution, up to 35% when the contribution reaches 40% of the investment. For systems up to 1 MW that directly access the mechanism upon entering operation, the awarded price is defined by ARERA pursuant to Article 4 of the decree, with possible differences based on technology and size.

The technical report accompanying the bill explains the logic behind the measure. The contribution advances a portion of the support and, based on the assumptions adopted for FER X, reduces by approximately 35% the level of support required for the energy produced. The reduced need for incentives is estimated at around 89 million euros per year, with positive effects on the costs of the electricity system.

What remains to be defined by the implementing decree

The criteria for granting, the implementation methods, and the monitoring of expenditure will be established by a decree from the Minister of the Environment and Energy Security, in coordination with the Minister of Economy and Finance. The deadline is 120 days from the entry into force of the budget law. If the law enters into force on January 1, 2027, the decree is expected by the end of April 2027.

The measure must clarify several operational aspects. These include the definition of eligible costs, the coordination with direct access to FER X, which for plants up to 1 MW occurs upon commissioning, and the allocation of the 3 GW across the three funded years. It remains to be seen how plants built in 2027 will be treated, given that the resources start from 2028.

For plants up to 1 MW, FER X ceases to apply 60 days after reaching 10 GW of capacity, and in any case by December 31, 2030. The 3 GW of the 2027 Budget Law therefore corresponds to 30% of that cap, which however includes all eligible technologies.

FAQ, solar photovoltaic subsidies in the 2027 budget law

Who is eligible for the 40% contribution for photovoltaic systems?

The subsidy is reserved for those who install a newly built photovoltaic system with a nominal capacity of up to 1 MW and access the FER X support mechanism (MASE Decree of June 18, 2026). The regulation does not provide for other categories of beneficiaries. Detailed requirements will be established by the implementing decree.

How much funding does the 2027 Budget allocate for photovoltaic systems up to 1 MW?

Article 79 of the 2027 Budget Bill allocates 1.2 billion euros. Of this amount, 800 million euros will be charged to the state budget in 2028, while 200 million euros will be allocated in each of the years 2029 and 2030, covered by the general costs of the electricity system earmarked for renewables. The fundable capacity is 3 GW.

Does the capital grant stack with the FER X incentives?

Yes, but with a reduction in the tariff. With a contribution equal to 40% of the investment, the winning price in the FER X auction is reduced by 35%; for lower contributions, the reduction is proportional. Those who opt for the contribution cannot combine the incentive with guarantee funds or tax benefits on investments.

Is the subsidy for photovoltaic systems up to 1 MW already operational?

No. The measure is included in the draft budget law, which must be approved by Parliament by the end of the year. A decree from the Ministry of Ecological Transition (MASE), in coordination with the Ministry of Economy and Finance (MEF), will then be required, to be adopted within 120 days of the law entering into force. Resources are allocated starting from 2028.

Can existing installations or upgrades access the subsidy?

The text of Article 79 refers only to newly constructed photovoltaic systems. Article 15 of FER X also allows the combination with capital grants exclusively for newly constructed systems. Therefore, retrofits and capacity upgrades, which can still access FER X, remain excluded.