How solar subsidies can distort the power market: the case of Italy

Carlo Stagnaro

MPRA Paper from University Library of Munich, Germany

Abstract: Italian policies to stimulate power production have been a success in the sense that solar power capacity has exploded, but they have also led to formidable costs. What is more, argues Carlo Stagnaro of the Italian think tank Istituto Bruno Leoni, support for green power has profoundly distorted the functioning of the Italian energy market. As solar power is subsidized and given unlimited priority access to the grid, the size of the "contestable market", where power producers compete with each other, has shrunk dramatically. Stagnaro warns that the measures now being discussed to remedy the problems will put further pressure on the market model in Italy and lead to more control from above.

Keywords: subsidies; renewable energies; solar power; electricity; competition; regulation; italy (search for similar items in EconPapers)
JEL-codes: D47 H23 K23 (search for similar items in EconPapers)
Date: 2012-07-05
New Economics Papers: this item is included in nep-ene
References: View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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