Italy Restricts Solar Tax Breaks to EU-Made HJT and Tandem Modules, Reshaping Renewable Energy Landscape
ROME, 10 November 2025 – Italy has unveiled a pivotal update to its “superammortamento” fiscal incentive scheme, limiting tax breaks for solar investments exclusively to high-efficiency heterojunction (HJT) and tandem perovskite modules manufactured in the European Union. The move, embedded in the newly approved 2026 budget law, aims to bolster Europe’s solar manufacturing sector but has ignited debate over market fairness and technical practicality.

New Policy Details and Eligibility Criteria

The revised policy, applicable to investments up to €2.5 million, mandates that eligible PV systems must use European-made bifacial HJT panels with cell efficiency exceeding 24% or tandem perovskite modules. This excludes mainstream technologies like TOPCon and back-contact (BC) modules, which dominate global markets but lack mass production within the EU.

The fiscal benefits are structured as follows:

• 130% tax credit for modules with minimum 21.5% efficiency.
• 140% tax credit for cells with 23.5%–24% efficiency.
• 150% tax credit reserved for EU-produced HJT or tandem modules achieving ≥24% cell efficiency.

This overhaul replaces previous standards, which offered lower incentives (120%–140%) and did not tie the highest subsidies to EU-manufactured HJT or tandem products.

Strategic Implications for European Solar Manufacturing

The policy directly advantages 3Sun, an Enel subsidiary operating Europe’s largest HJT production facility in Catania, Sicily. With mass-scale HJT output since 2018, 3Sun is currently the only EU-based manufacturer capable of meeting the new criteria at scale. Nicola Baggio, Technical Director of FuturaSun—a Italian TOPCon and BC producer—publicly criticized the rules for granting 3Sun a “strategic advantage”.

The regulation also aligns with Italy’s broader push to localize clean energy supply chains. Earlier in 2025, the “FER X” renewable auction program introduced quotas favoring projects using non-Chinese components, reinforcing the EU’s strategy under the Net-Zero Industry Act to achieve 40% domestic manufacturing in strategic technologies by 2030.

Industry Reactions and Technical Concerns

Stakeholders have raised objections to the policy’s design:

• Efficiency Measurement Inconsistencies: Laura Sartore, Vice President of the European Solar Manufacturing Council (ESMC), noted that cell efficiency metrics ignore cell-to-module (CTM) losses, which can reduce output by 15%–20% due to glass, encapsulants, or welding quality. A 24% efficient cell might yield a sub-23% module, undermining performance claims.
• Environmental and Structural Limitations: HJT panels, often glass-glass bifacial designs, are heavier and prone to performance degradation under high humidity, extreme heat, or intense UV exposure. These traits limit their suitability for roofs with low load capacity or installations in harsh climates.
• Supply Chain Gaps: Andrea Rovera of Gruppo Green Design highlighted that the ENEA module registry—Italy’s official database—does not list efficiency values for 3Sun cells, creating transparency issues. He also observed that the policy’s sudden inclusion in the final budget draft “raised doubts among operators”.

Economic and Geopolitical Context

Italy’s move intensifies competition with U.S. and Asian solar industries. While the U.S. Inflation Reduction Act (IRA) previously lured European manufacturers like Meyer Burger with subsidies, Italy’s refined incentives have prompted the German-Swiss firm to resume HJT module exports to Italy.

Funding for the “Transizione 5.0″ scheme derives from €6.3 billion in REPowerEU allocations, with €1.89 billion dedicated to self-consumption renewable assets. The policy permits combining tax credits with special economic zone incentives, further enhancing returns for compliant projects.

Broader Market Impact

Italy’s solar capacity has expanded rapidly, reaching 40 GW cumulative installations in 2025. However, the new rules risk slowing near-term deployment by narrowing technology options. According to ESMC, tandem perovskite modules—though eligible—remain “nearly absent on the market,” leaving 3Sun as the primary beneficiary.

Looking Ahead

The policy underscores a growing trend of green industrial protectionism in the EU. While it may accelerate European HJT innovation, its success hinges on overcoming supply chain bottlenecks and ensuring cost-effectiveness. As Sartore noted, HJT technology “is not yet universal or always economically viable”.