Italy Adjusts Renewable Energy Subsidies; Incentive Levels Depend on Array of Factors

ROME—The Italian government May 6 released a renewable energy decree mapping out future reductions in the feed-in subsidies for green energy producers.

While the measure, officially called the IV DECREE on Renewable Energy, lowered the government-sponsored incentives only slightly compared to current levels, it reduced the cap on the amount the government can spend on incentives from €990 million ($1.47 billion) to €820 million ($1.21 billion), and it will be further reduced to €580 million ($860 million) in 2012.

The decree, which took effect retroactively starting May 2, will allow energy producers already connected to the grid to lock in ...