The decree for Renewable Energy Communities (RECs) has finally come into force

The decree to promote the creation and development of Renewable Energy Communities (RECs) finally came into force on 24 January. After being greenlit by Europe, the document was registered by the Court of Auditors and published on the website of the Ministry of the Environment and Energy Security.

But what is new compared to previous incentives?

The Italian REC decree is essentially based on two measures:

• A tariff incentive on the renewable energy produced and shared, i.e. virtually consumed within the REC itself, with energy cost savings for those forming an Energy Community. The measure covers the entire country (from the small municipality to the big city) and the total incentive power is 5 Gigawatts, with a deadline of 31 December 2027.

• A non-repayable grant of up to 40% of eligible costs for communities in municipalities with fewer than 5,000 inhabitants in relation to the investment made to set up a new installation or to upgrade an existing one. This measure, says the Ministry, is financed with €2.2 billion from the NRRP (National Recovery and Resilience Plan), with the goal of realising a total capacity of at least 2 Gigawatts, with a deadline of 30 June 2026. The non-repayable grant may be added to the incentive tariff within set limits.

The planned benefits cover all renewable technologies, such as photovoltaics, wind, hydro and biomass; the capacity of individual installations may not exceed 1 Megawatt.
The measure is aimed at natural persons, small- and medium-sized enterprises (SMEs), regional or local authorities, municipal administrations, research and training bodies, religious bodies, third sector and environmental protection bodies, as well as local administrations that form an REC.

What are the requirements for accessing the feed-in tariff for renewable energy consumed within the REC?

The REC decree is based on two measures, namely a feed-in tariff for the renewable energy produced and shared and a non-repayable contribution. To access the first tariff, certain requirements must be met:

• The maximum power of the individual installation (or the upgrading operation) may not exceed 1 MW;

• The production plants and withdrawal points that are part of RECs are connected to the power grid via connection points that are part of the area underlying the same primary substation

• RECs must be established on the date of application for access to the incentives;

• The RECs must ensure that all final consumers are fully and adequately informed, in advance, of the benefits accruing to them from access to the tariff. They must also formally require that any amount of the feed-in tariff in excess of a given threshold is to be allocated only to consumers, other than companies, who are members or associates of the RECs or used for social purposes having an impact on the areas in which the installations are located.

What are the requirements for access to the non-repayable grant?

These are the requirements to access the non-repayable grant funded by the NRRP:

• The maximum power of the individual plant (or of the upgrade) must not exceed 1 MW;

• RECs must already be established on the commissioning date for the installations qualifying for the benefit;

• The REC production plants and withdrawal points must be connected to the grid via the same primary substation;

• The start of the work must be after the date of the application;

• Where foreseen, they must be in possession of a permit for the construction and operation of the installation and the definitively accepted grid connection quotation;

• The contribution must be recognised by 31 December 2025 (in order to obtain the funds under the NRRP);

• Commissioning must take place within eighteen months from the date of the grant and in any case no later than 30 June 2026.

What are the requirements for setting up an REC and the steps for accessing benefits?

To be able to form an REC, participants must be located in a single geographical area since everyone (producers and consumers) will have to be connected to a single primary substation. An REC may consist of one or more grid-connected renewable energy plants (storage is optional), and associated bodies may choose their own energy supplier.
As already mentioned, each individual renewable energy installation must have a maximum capacity of 1 MW: an REC may have several production plants, but they must be connected to the electricity grid under the same primary cabin. Installations that have already been constructed may also be included in the REC and be eligible for the incentives, provided that they came into operation after 16 December 2021 (the date of entry into force of Legislative Decree no. 199/2021) and, in any event, after the regular establishment of the REC. The installations must also not benefit from other energy production incentives.

Instead, here are the steps that a potential member of an REC can follow in order to obtain the incentive:

1. First of all, it is necessary to identify the area where the installation will be realised and the other associated users, who will be connected to the same primary substation;

2. It is now possible to create the REC through a charter or deed of incorporation. This REC will have the main purpose of providing environmental, economic or social benefits to its members or partners at community level or to the local areas in which the community operates, and not to make financial profit. Optionally, it is possible to check in advance with the Gestore Servizi Energetici (Electricity Services Operator - GSE) whether the project is eligible for an incentive;

3. Next you obtain authorisation to install and connect your plant to the grid, so that it can become operational;

4. Finally, you can apply for the incentive from the GSE using the GSE's IT Portal: https://areaclienti.gse.it.

The submission deadline for applications is 31 March 2025.