Italy upgrades solar manufacturing tax credit

Recently, Italy updated the tax credit standards for high-efficiency solar cells and modules in the Transizione 5.0 Tax Credit Scheme. The plan aims to encourage industrial investment in renewable energy projects, including photovoltaics, to reduce energy consumption and support beneficial projects known as "innovative projects".

According to the 2025 budget bill, the tax credit amount will be calculated based on the following efficiency threshold: the tax credit for a component with a minimum conversion efficiency of 21.5% will be calculated at 130% of its cost; Calculate based on 140% of the cost for battery efficiency ranging from 23.5% to 24%; The battery efficiency of 24% or above is calculated at 150% of its cost.

Among them, a 150% tax credit applies to double-sided heterojunction (HJT) or stacked battery modules produced within the European Union, which must have a battery efficiency of 24% or higher and be produced within the EU.

The latest bill has raised the credit standards compared to previous versions. The old standards were 120% tax credit for batteries with a minimum efficiency of 23.5%, and 140% tax credit for double-sided or stacked batteries with an efficiency of 24% or more.

According to local consulting firm ReteAevolazioni, these tax credits can be combined with investment incentives in Special Economic Zones.

The "Transformation 5.0 Plan" aims to help businesses optimize their production processes by adopting sustainable renewable energy models. Its funding comes from the 6.3 billion euros of the EU REPowerEU program, of which 1.89 billion euros are specifically used to support investments in the spontaneous production of renewable energy assets by enterprises.

This plan is open to all companies and permanent establishments within Italy. Together with the 'Transformation 4.0 Plan', the total budget of the two plans amounts to 12.7 billion euros. The tax credit is applicable to new investment projects between January 1, 2024 and December 31, 2025, as confirmed by Italian companies and the 'Made in Italy' department.