The European Commission announced last week it had approved a €5.7 billion scheme for the deployment of energy communities in Italy.

The initiative supports the expansion of small existing renewable power generation projects and new projects that are no bigger than 1 MW, according to the press release.

The scheme is divided into two funding streams.

The first stream, with a total budget allocation of €3.5 billion, is a 20-year tariff on the quantity of electricity consumed by self-consumers and renewable energy communities financed through a levy on the electricity bill of all consumers. A renewable energy community in this context is defined as, “legal entities empowering citizens, small businesses and local authorities to produce, manage and consume their electricity.”

The second stream, with a total funding allocation of €2.2 billion, is an investment grant paying for under half (40%) of a project’s total costs. Projects would be located in 5,000-person municipalities and be operational before June 30, 2026.

The second arm of the funding was made available through the €723.8 billion Recovery and Resilience Facility (RRF) – a European Commission instrument aimed at strengthening the European Union (EU) following the Covid-19 pandemic.

The allocation came after the European Commission’s “positive assessment” of Italy’s Recovery and Resilience Plan – approved July 31, 2021 – which called for a €11.2 billion investment in improving and developing the Mediterranean country’s renewable energy technologies, circular economy and water waste and management facilities, among others.

According to recent numbers provided by the Polytechnic University of Milan, Italy has currently 104 energy communities in operation. “Considering the project under development, their number may soon reach 191,” the university said in a report.

In 44% of cases, the promoters of the energy communities are municipalities, while in the other cases, they are mainly private companies. More than 70% of the energy communities analyzed use systems with a total power of less than 200 kW and 100% of them are photovoltaic energy.

Gestore dei Servizi Energetici (GSE), the Italian energy agency, recently published an interactive map of the primary substations in Italy. The tool allows users to geolocalize connection points for energy communities, as required by Italian legislation on self-consumption.

Italy introduced new provisions for solar energy communities in March 2020.