European Solar Manufacturers Urge Italy to Revise Heterojunction Tax Rule

Essential brief

Key facts

Italy’s 2026 budget law limits solar investment tax incentives to heterojunction (HJT) technology.

Eleven European solar manufacturers argue this favoritism risks higher costs and reduced competition.

The current rule may discourage adoption of other efficient and cost-effective PV technologies.

Manufacturers call for a more inclusive incentive framework to support diverse solar technologies.

Revising the tax rule could promote innovation, lower costs, and advance Italy’s renewable energy goals.

Highlights

Italy’s 2026 budget law limits solar investment tax incentives to heterojunction (HJT) technology.

Eleven European solar manufacturers argue this favoritism risks higher costs and reduced competition.

The current rule may discourage adoption of other efficient and cost-effective PV technologies.

Manufacturers call for a more inclusive incentive framework to support diverse solar technologies.

In late 2025, a coalition of eleven European solar module manufacturers publicly appealed to the Italian government to reconsider specific provisions in its 2026 budget law related to solar energy tax incentives.

The manufacturers expressed concern that the current tax framework disproportionately favors heterojunction (HJT) solar technology by restricting investment incentives exclusively to this narrow category.

HJT technology, which combines crystalline silicon with amorphous silicon layers, is known for its high efficiency but is also typically more costly to produce compared to other photovoltaic (PV) technologies.

The companies argue that this preferential treatment risks inflating overall solar installation costs in Italy and could stifle competition within the broader European PV market.

By limiting incentives to HJT modules, the policy may inadvertently discourage innovation and adoption of alternative, potentially more cost-effective solar technologies such as PERC or bifacial modules.

The manufacturers advocate for a more inclusive tax incentive framework that supports a diverse range of solar technologies, fostering healthy competition and driving down costs for consumers and developers.

This appeal highlights broader tensions within the renewable energy sector, where government policies must balance promoting cutting-edge technologies with maintaining market fairness and affordability.

Italy's approach to solar incentives could have significant implications for the European PV industry, influencing investment decisions and technology deployment across the continent.

Revising the tax rule to encompass multiple solar technologies may accelerate Italy’s renewable energy goals while supporting a competitive and innovative solar manufacturing landscape.

The manufacturers’ call underscores the importance of policy frameworks that encourage technological diversity and cost efficiency to achieve sustainable growth in the solar sector.