Italy minister: no capacity cap for solar aid: Ansa

MILAN (Reuters) - Italy will not set solar power capacity limits under a new incentive scheme but will instead cap the amount of money it intends to spend for incentives, the environment minister was quoted as saying on Monday.

Details of Italy's new support scheme for the solar sector are keenly watched by international investors and industry operators who fear that an annual cap on incentivised capacity would slow down the country's booming solar market.

Earlier this month, the government decreed that current incentives would apply only to solar plants that connect to the grid by the end of May, adding a new support scheme would set an annual cap on capacity eligible for incentives.

"From 2012 we will proceed ... without setting a cap on incentives in terms of annual megawatts but with a cap on a total of millions of euros (to be spent) until the end of incentives," Environment Minister Stefania Prestigiacomo was quoted by news agency Ansa as saying.

It was not immediately possible to confirm her comments.

The government is due to issue a decree on new solar incentives by the end of April.

Big energy consuming industries have been pushing for an annual limit on the incentivised solar capacity as debate about the new support scheme heated up, a renewable energy source told Reuters.

Last Wednesday, Italy's junior industry minister Stefano Saglia said the government is looking to introduce an annual cap for new solar incentives.

Earlier in March, Industry Minister Paolo Romani said that once Italy had installed 8,000 megawatts of solar capacity, feed-in-tariff incentives would cost some 35 billion euros ($49.34 billion) in 10 years.

Prestigiacomo also said on Monday the government would seek ways to safeguard investments in the renewable energy projects under development which may fail to connect to the grid by the May deadline.

"This will allow (investors) to overcome a series of problems which do not depend on those who have made investments," she said.

Grid connection is a notoriously lengthy process in Italy.

After May, the government would slightly cut incentives making sure "not to penalise investments under way which have been programed under the old incentive scheme and not completed by the end of May," Prestigiacomo said.

Her comments confirm what a senior trade union official who was present at a meeting with Italy's industry and environment ministers told Reuters on Thursday.

Italy's solar sector, among the biggest in Europe, has boomed since 2007, when some of Europe's most generous production incentives were launched.

It has attracted the world's biggest photovoltaic module makers such as China's Suntech Power Holdings Co, Trina, Yilgli Green Energy and U.S. firm First Solar.

Italy's biggest renewable operator is Enel Green Power while utilities such as Edison and CIR energy unit Sorgenia have renewable businesses.

(Writing by Svetlana Kovalyova; Editing by David Gregorio)