Italy will continue its solar subsidies until end-August, giving a reprieve to developers who had been told that the subsidy would end end-May.
According to Business Green, ministers announced late last week that regional leaders had asked for an extension to the end of the year, but the government said it was only prepared to carry on the tariff another three months before fixed caps and cuts of up to 60 per cent kick in.
"The decree will contain an extension until 31 August," industry ministry undersecretary Stefano Saglia, in charge of energy issues, told reporters.
Italy's solar power sector has surged since the government introduced incentives four years ago, attracting some of the world's biggest photovoltaic module makers, including China's Suntech Power Holdings and US firm First Solar.
But with the government concerned over rising debts, the scheme was due to be cancelled - a decision strongly opposed by the regional legislatures. Reports suggest that the regions, which the government must consult before making its final decision, want to raise the cap on solar sector production incentives and lessen the cuts in feed-in tariffs planned for 2013 to 2016.
The government, meanwhile, plans to cap solar developer subsidies at €6bn to €7bn a year by the end of 2016, when it expects installed capacity to have risen to 23GW.
Developers have claimed that Rome's cuts, married with additional red-tape, would stymie a booming sector, and Reuters reported on Wednesday last week that a group of foreign solar power investors claimed to have started legal proceedings against Italy over the proposals.