In 2020, Italy has adopted a law on self-consumption and renewable energy communities (law N8/2020), providing a general regulatory framework. Within a subsequent consultation document by the Italian Authority for Energy, Networks and Environment (ARERA), two models are introduced:

Collective self-consumers

Collective self–consumers (CSC) of renewable energy with a focus on condominiums: natural persons or commercial actors, for whom generation and energy exchange is not the core business and that are located in the same building or condominium.

RECs and CECs

Renewable energy communities (REC) involving natural persons, small and medium enterprises, local/regional authorities (e.g. municipal administrations), and private companies. Generation plants (individually not exceeding 200 kW) need to be located in the low or medium voltage network behind the same transformer station (MV/LV substation).

In 2020, Italy set up an incentive scheme targeting self-consumption of RES geographically limited to the same MV/LV substation or at condominium level (CSC of RES). In both cases, within a “virtual” model, RECs and CSC schemes can join and exchange electricity through the public low voltage electricity network. For CSC and RECs, the self-consumption is calculated on hourly basis as the minimum of aggregate production and aggregate consumption. 99.5% of final users in Italy already have smart meters.

While the phase from January 2021 onwards was considered as a transitory experimental stage only for REC and collective self-consumption in November a basic definition for CECs was adopted.

For the electricity shared through the public network, members receive a refund for the electricity exchanged within the community. This refund represents the consumption-based part of the transmission/distribution losses related costs and amounts to 0,822€c/kWh of self-consumed energy (sum of the transmission tariff for low voltage users, equal to 0,761 €c/kWh for the year 2020, and the higher value of the variable distribution component for other low voltage users, equal to 0,061 €c/kWh for the year 2020).

For collective self-consumers, the tariff is further reduced by the network losses charge (1,2% for medium voltage and 2,6% for low voltage; variable depending on the voltage level and the hourly zonal price of electricity. Taking as a reference, purely by way of example, the average single national price of 2019 would have a value equal to approximately 0,13 €c/kWh for the low voltage and approximately 0,06 €c/kWh for medium voltage). This reduction is however not applicable to RECs (ARERA 2020).