Agrivoltaics is emerging as a key alternative in Italy’s energy sector, not only due to its electricity generation capacity but also because of its positive impact on agricultural production. However, competition with conventional photovoltaics and the lack of differentiation in incentive systems and energy auctions could slow its deployment.

Francesco Marghella, Senior Energy Analyst and Partner at Althesys Strategic Consultants, explains that currently, “auctions under the ‘FER X transitory’ (2025) and ‘FER X’ (from 2026) schemes do not separate agrivoltaics from traditional photovoltaics, which could hinder its initial deployment.”

“The current financial models often fail to capture the complexity of the technology, as they apply conventional photovoltaic metrics that overlook agronomic value. To unlock its full potential, new economic indicators reflecting agrivoltaics’ dual benefits are needed, along with a more comprehensive approach to assessing profitability,” Marghella stated in an interview with Strategic Energy Europe.

However, a shift in the sector’s dynamics is expected with the implementation of the Agriculture Decree Law, which limits the installation of new conventional photovoltaic plants on agricultural land. This could reshape the market and encourage the adoption of agrivoltaics.

The expert highlights that “this will position agrivoltaics as the leading large-scale solar solution for agricultural areas, accelerating its deployment. Furthermore, when considering all the non-energy benefits of agrivoltaics, this technology could already be more profitable than conventional solar.”

Nevertheless, he warns that the success of this transition will depend on agrivoltaics receiving differentiated treatment within incentive systems. “To fully unlock its potential, it is essential that agrivoltaics have a regulatory framework that recognizes its added value,” he emphasizes.

Profitability and Competitiveness of Agrivoltaics in Italy

Unlike traditional solar plants, agrivoltaics should not be evaluated solely as a photovoltaic generation asset, which is typically assessed based on electricity sales and the internal rate of return (IRR). Marghella points out that its profitability should be analyzed based on its contribution to agricultural productivity, soil preservation, and rural development.

“Agrivoltaics offers critical advantages that are often overlooked in financial models, such as protection against extreme weather events, which also reduces insurance costs. It contributes to biodiversity and water conservation. Public perception, farmer acceptance, and integration with grid infrastructure also influence its competitiveness,” says the representative of Althesys Strategic Consultants.

Current financial models apply conventional photovoltaic metrics, failing to capture its full value. In response to this limitation, associations in Italy have emerged to promote new economic evaluation frameworks.

In terms of costs, Marghella explains that “simple ground-mounted agrivoltaic systems have a CAPEX similar to traditional solar plants, but elevated and innovative systems have slightly higher capital and operational costs.” This cost structure results in a higher LCOE compared to large-scale photovoltaics, though it remains competitive with onshore wind energy.

Beyond initial installation and maintenance costs, the competitiveness of agrivoltaics depends on several factors:

• Compatibility with crops and improvements in agricultural efficiency, which determine the system’s viability.
• Technological design and innovation, such as bifacial panels and tracking systems, which optimize energy generation without compromising agricultural activity.
• Integration with electrical infrastructure and regulation, factors that influence how quickly agrivoltaic projects can connect to the grid and operate efficiently.

Despite these challenges, agrivoltaics currently ranks as the second-lowest-cost generation source in Italy, reinforcing its attractiveness and potential in the energy sector. With the implementation of a regulatory framework that reflects its dual benefits, agrivoltaics could establish itself as a key component of the country’s energy transition.

Projections and Policies to Reach 7 GW of Agrivoltaics by 2030

The agrivoltaic sector is experiencing rapid growth in Europe, driven by the EU’s sustainability goals. In Italy, projections indicate that by 2030, large-scale agrivoltaic capacity with tracking systems will range between 6.4 GW and 13 GW, representing 11% to 16% of total solar capacity.

“Additional capacity is expected from small and medium-sized installations (<1 MW), though their contribution will be more limited,” the consultant notes.

Geographically, 31%-34% of agrivoltaic capacity is expected in northern Italy, while central regions would host approximately 37%, with the rest being installed in the south, including Calabria, Sicily, and Sardinia. To reach the projected 7 GW, Marghella emphasizes the need to simplify permits and establish clear land-use policies.

“Simplifying the permitting process can accelerate project approvals and reduce administrative burdens. It is also essential to establish clear land-use policies to balance agricultural and energy priorities. Encouraging partnerships between farmers, energy companies, and research institutions can drive innovation,” he explains.

He also warns that the key short-term challenge will be competition with traditional photovoltaics within the FER X transitory auction scheme for 2025 and FER X for 2026. As large-scale conventional photovoltaic projects face increasing restrictions on agricultural land, agrivoltaics could emerge as the primary alternative.

Technical and Regulatory Challenges for Agrivoltaics in Italy

The development of agrivoltaics not only faces economic and regulatory barriers but also technical challenges. Among them, the design and integration of solar panels with agricultural activity is one of the most complex aspects. Marghella notes that “the height, spacing, and tilting mechanisms must enable efficient farming operations while optimizing energy generation.”

Another technical challenge is the use of agricultural machinery under and around solar installations. However, advancements in automation and precision farming technologies are enabling the adaptation of equipment for agrivoltaic environments and improving agricultural efficiency.

On the regulatory side, the complexity of land-use regulations, permitting processes, and landscape integration cause delays in project approvals.

The virtual saturation of the electrical grid is one of the main barriers slowing down renewable technologies in Italy, creating bottlenecks. It is worth noting that, according to figures published by Terna, more than 300 GW are awaiting connection.

“While there are technical constraints, part of the saturation problem is due to outdated planning and inefficient grid allocation mechanisms rather than actual physical limitations,” the specialist warns.

In this context, the Italian government is working with the transmission system operator (TSO) and distribution system operators (DSOs) to modernize the grid and improve connection capacity.