The Italian government has announced green economic stimuli measures to overcome the economic consequences of the Corona Crisis. The “ECO bonus” is steered to encourage green and sustainable investments which can become an important complementary financing source for RE projects and the SCORE pilots in the Susa Valley.
Subject to the “Decreto Rilancio” with an overall volume of EUR 55 billion, the “ECO-Bonus 110%” encourages citizen investments in ERS – with a particular focus on low-income households:
(i) The bonus finances private household investments in a) RES (e.g., PV, integrated storage, charging stations) and b) EE measures (substitution of fossil heating systems, installation of heat pumps, insulation measures, etc.).
(ii) Individual bonuses have a cap of e.g., EUR 30,000 for PV and EE measures for each residential unit; condominiums have a pooled ceiling.
The instrument to facilitate investments is a so-called “tax credit” (the Italian state refinances the program from foregone tax revenues) and foresees three steps:
(i) enterprises in the Green economy (installers, plant engineers, ESCOs, etc.) provide the service to an individual household who is invoicing the price of the installation and concerning services with a discount of 100% of the total cost (the citizens thus do not need any liquidity but receive the benefits simply against the invoice which is crucial for the inclusion of low-income households);
(ii) the invoicing enterprise in turn receives the cost of the operation plus 10% in five yearly instalments from the financial institution commissioned with carrying out the program, usually a bank (the additional 10% compensate for the deferred payment as well as for the administrative burden of carrying out the individual transactions, i.e., the transaction cost);
(iii) the financing institution receives corresponding funds from the foreseen government program balancing its payments periodically.
In a variant of the scheme the household finances the investment itself and receives the five yearly payments corresponding to the “110% bonus” (thus including the additional 10%) directly from the state program. However, in this case the enterprise is paid by the household which targets social groups disposing of savings or access to capital credit.
Applications can be filed from 1 July 2020 until 31 December 2021.