Italy implemented the final FER X scheme on August 7th , a new program designed to incentivize renewable energy plants whose generation costs are close to market competitiveness. The framework opens up 27.15 GW through competitive bidding processes and reserves another 10 GW for direct access , bringing the potential volume to 37.15 GW.
Within the auctions managed by the Gestore dei Servizi Energetici (GSE), wind power accounts for 16.5 GW and solar photovoltaics for 10 GW . The remainder corresponds to 630 MW of hydroelectric power and 20 MW for installations that use waste gases from purification processes.
“Access is structured according to the plant's capacity. For facilities up to 1 MW, direct access is planned, without auction, with an award price set administratively by ARERA and a specific quota of 10 GW,” explained Ludovica Terenzi, Managing Partner of Greensquare, in dialogue with Energía Estratégica.
The Ministerial Decree of June 18, 2026, implements Articles 6 and 7 of Legislative Decree 199/2021, replaces the transitional FER X of December 2024, and will remain in force until December 31, 2030. The eligible technologies are solar photovoltaic, wind, hydroelectric, and wastewater treatment gas.
The rollout comes at a time when Italy still needs to significantly increase the share of clean energy sources. According to data from the 2025 report by the Ministry of Environment and Energy Security (MASE), renewable energy sources currently represent around 20.5% of final energy consumption , compared to the 39.4% expected by 2030 .
In terms of generation, photovoltaics produced around 9 TWh more and grew by 25% , offsetting much of the decline in hydroelectric power, which exceeded 20%. The new regime seeks to ensure the continuity of this expansion through long-term economic signals.
Two paths depending on the size of the projects
The scheme differentiates entry based on power output. Installations up to 1 MW have direct access , without needing to compete in an auction, and have a specific quota of 10 GW.
Projects larger than 1 MW must participate in competitive, descending-price bidding processes . For photovoltaics, the decree also stipulates that the capacity considered will be the sum of the nominal power of the modules, a parameter that will define which side of the threshold each plant falls on.
“The support takes the form of a two-way contract for difference, with a duration of twenty years,” Terenzi explained. The GSE compensates the producer when the market price falls below the awarded value and recovers the difference when the opposite occurs.
For plants up to 200 kW, the scheme includes as an alternative a comprehensive tariff on the net energy injected into the grid. For plants larger than 1 MW, the reference operating prices are 80 euros/MWh for photovoltaics, 85 euros/MWh for wind, 90 euros/MWh for hydroelectric, and 85 euros/MWh for waste gas.
The design also incorporates specific incentives for certain solar configurations. Replacing asbestos roofing adds €27/MWh to the awarded price , while projects developed on water surfaces receive an additional €10/MWh.
These premiums introduce a territorial signal for photovoltaics: the additional financial support favors already developed areas or alternative sites , instead of basing expansion exclusively on projects on land.
More requirements to compete for the 27.15 GW
To enter the procedures, developers must have authorization to build and operate, a definitively accepted connection proposal, and registration in Terna's GAUDÍ system . They will also have to demonstrate financial stability and comply with dispatch obligations.
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“The process includes a prequalification phase, an expression of interest, and an application to participate,” Terenzi explained. The expression of interest must be accompanied by a provisional guarantee equivalent to 5% of the investment cost , while the final guarantee amounts to 10% .
Regarding economic capacity, the information provided establishes a reference equivalent to 10% of the investment for projects up to 100 million euros , 5% for the range between 100 and 200 million euros, and 2% for amounts exceeding that level.
The winning bidders will also have limited timeframes to develop their projects. Photovoltaic and wind power plants will have 36 months from the publication of the rankings , while new hydroelectric plants will have up to 54 months.
Delays will progressively reduce the recognized price: 0.2% per month for the first nine months and 0.5% for the following six . A delay exceeding the limit will result in the loss of the ranking position and the execution of the guarantee.
“The delay implies progressive reductions in the contract price,” warned the Managing Partner of Greensquare. Thus, administrative maturity and actual construction capacity will have a direct impact on the project's profitability.
The Net-Zero Industry Act enters the auctions
One of the most impactful changes for manufacturers and developers is concentrated in photovoltaic and wind power projects larger than 1 MW , where the FER X incorporates criteria derived from the European Net-Zero Industry Act.
“The conditions include responsible business conduct, cybersecurity and data protection, the ability to execute the project within the planned timeframe and resilience linked to the origin of the components (a criterion of special importance), reserving at least 30% of the quota for specific procedures,” the lawyer explained.
“Flexibility is guaranteed by a storage system equivalent to at least 25% of the plant's capacity,” Terenzi explained. The impact of the location on the system's needs and the possibility of integrating different energy sources are also being evaluated.
The decree does not establish a blanket ban on Chinese components , but rather resilience criteria related to the origin and diversification of supply. This distinction is relevant because industrial compliance, along with price, financing, and permitting, plays a role in structuring bids.
This condition may be especially relevant for photovoltaics, since the combination with batteries allows production to be shifted and provides flexibility during peak solar generation hours , reinforcing the integration of the new power into the electrical system.
However, the publication of the FER X does not yet complete the regulatory process . The GSE operating rules and the MASE decree on quotas are still pending, expected within 60 days of its entry into force. ARERA has 90 days to determine the direct access prices.
“The decree establishes the framework; the detailed rules will come with the implementation measures,” Terenzi noted. This second stage will finalize the practical conditions under which developers, funders, and manufacturers will prepare their projects.
The calendar already marks the next milestone: “The first auction is scheduled for the fall of 2026, after the pre-qualification phase of the plants,” the Greensquare executive anticipated.
With 27.15 GW subject to competition and another 10 GW available through direct access , FER X is now focusing on implementation. Italy must convert this regulatory volume into built capacity before the end of the decade, while attempting to increase its renewable energy share from the current 20.5% to the 39.4% projected for 2030.