Italy

Overall assessment

The Italian National Recovery and Resilience Plan (PNRR), officially published in July 2021, earmarked €2.2 billion to support Renewable Energy Communities (RECs) and collective self-consumption schemes (SCSs), with the objective of enabling at least 1,730 MW of community-led renewable capacity by June 2026.

The measure provides investment grants covering up to 40% of eligible costs for renewable energy production plants. Eligible expenditures include technical and technical-scientific assistance, the purchase of components essential for the construction of energy production, distribution and sharing facilities, as well as storage systems. Legal and administrative support costs related to the definition of contractual and governance arrangements are also eligible.

This investment-based support has been subsequently complemented by an additional operational support scheme, introduced through Legislative Decree 199/2021 and later on regulated by Ministerial Decree 414/2023, which formally completed the transposition of the RED II Directive and established the regulatory framework for incentivising shared renewable energy within energy communities (RECs) and collective self-consumption schemes (SCSs).

In November 2023, through Decision SA.106777 (2023/N), the European Commission approved, under the Climate, Energy and Environmental Aid Guidelines (CEEAG), the overall support scheme notified by the Italian Government to foster the deployment of renewable energy capacity and the self-consumption of renewable electricity. The scheme is composed of two complementary measures:
– Measure 1, applicable to all eligible beneficiaries and financed through a levy on electricity consumption;
– Measure 2, targeting initiatives in smaller municipalities and financed through the Recovery and Resilience Facility (PNRR), with funds to be committed by 31 December 2025.
Overall, the scheme aims to support the installation of up to 5 GW of renewable capacity by 31 December 2027, with an estimated total aid amount of €5.7 billion.

Measure 1 consists of a premium tariff granted for a period of 20 years on electricity that is shared within, or self-consumed by, Renewable Energy Communities. The level of the premium varies according to the size of the installation, thereby incentivising economies of scale, and is further adjusted for photovoltaic installations based on regional solar irradiation levels, with the aim of ensuring fair compensation and a level playing field across different geographical areas.


Measure 2 takes the form of an investment grant covering up to 40% of eligible investment costs for renewable energy production plants located in municipalities with fewer than 5,000 inhabitants* (*see below, this value has been subsequently raised to 50,000). Eligible costs include, inter alia, the installation of renewable generation plants, the supply and installation of storage systems, machinery, and grid connection works, subject to specific caps for certain preparatory, technical and consultancy expenses.


In order to remain eligible for the premium tariff under Measure 1, investments by Renewable Energy Communities must be financed through non-repayable public support (from RRF or other public funds) up to a maximum of 40% of the total eligible costs. Where capital grants are awarded, the premium tariff for shared energy is reduced proportionally to the share of investment costs covered by such grants, in accordance with the applicable rules on the cumulation of State aid. (NB: This reduction does not apply to withdrawals within energy sharing congigurations attributable to natural persons, local authorities, Third Sector organisations and religious entities.)

With specific reference to Measure 2, the call for proposals was issued by the Ministry of the Environment and Energy Security (MASE) only in January 2024, and the online portal for submitting grant applications became operational in April 2024.

 In its initial formulation, the measure was restricted to initiatives located in municipalities with fewer than 5,000 inhabitants; however, in June 2025, through MASE Decree No. 127/2025, the eligibility threshold was raised to 50,000 inhabitants.

This extension was introduced in response to a lower-than-expected uptake of PNRR funds, raising the risk that a significant share of the allocated resources might remain uncommitted within the required timeframe. By broadening the beneficiary base, the measure aimed to accelerate implementation, ensure full absorption of allocated resources, and secure compliance with the PNRR timeline.

In September 2025, the European Commission requested the Italian authorities to carry out a reality check on Measure 2, in order to realistically assess the volume of resources that could be allocated and the number of projects that could be completed within the required timeframe, and to define a corresponding realignment of the financial allocation. 

In this context, on 24 November—prior to the closure of the call and ahead of formal EU approval—the GSE announced a reduction of the PNRR resources allocated to Renewable Energy Communities from €2.2 billion to €795.5 million, generating confusion among operators in the final phase of application submission.

On 27 November, the European Union approved the Council Implementing Decision (CID) related to the PNRR revision aimed at realigning resources with the actual needs of each measure. 

By the call deadline of 30 November, 48,750 applications had reportedly been submitted, corresponding to approximately 3.34 GW of installed capacity and requesting €1.456 billion in funding, suggesting that, even after excluding applications deemed ineligible, a significant funding gap is likely to remain.

 The GSE has 90 days from the closure of the call—until approximately the end of February—to complete the evaluation procedures, after which MASE will identify eligible but unfunded applications and analyse their territorial distribution across Regions. The MASE has proposed a joint initiative with the Regions to use unspent Regional Development Funds to finance eligible projects that remained unfunded under the PNRR and is already being examined by some Regions, including Sicily and Lombardy.

In parallel, a further PNRR revision is expected in February 2026, in conjunction with the disbursement of a new instalment, to assess the possible reallocation of unused resources from other measures. 

Detailed assessment

General: allocation, definition, transposition

Specific allocation for energy communities

The Italian Recovery and Resilience Plan earmarked €2.2 billion in support of Renewable Energy Communities, with the objective of enabling the production of approximately 2,500 GWh of clean, community-led renewable energy in municipalities with fewer than 50,000* inhabitants. (*fewer than 5,000 inhabitants in its initial formulation).

Alongside the specific call dedicated to Renewable Energy Communities (RECs) and collective self-consumption schemes (SCSs), within Recovery Fund Mission 2 (Green Revolution and Ecological Transition), at least two additional calls had been launched in previous years that could indirectly support the establishment of RECs. These included the Green Islands measure (M2C1I3.1), which allocated €200 million to 13 municipalities across 19 small islands not interconnected with the Italian national electricity grid, and the Green Communities measure, which allocated €135 million to support the creation of 30 “green communities”, defined as groupings of local administrations jointly implementing integrated sustainable development plans.

Definition of energy communities in line with EU legislation

The definition of energy communities adopted within the Italian RRF (PNRR) framework is fully aligned with EU legislation. In particular, Renewable Energy Communities (RECs, or CER in Italian) are defined in Legislative Decree No. 199/2021 (Article 31), which transposes and reflects the definition set out in the RED II Directive.

Proportionality of share of total fund allocated to energy communities

The level of investment dedicated to energy communities is proportional to the overall financial resources allocated to renewable energy deployment within the Italian RRF, reflecting the strategic role attributed to community-led energy initiatives in the national decarbonisation pathway.

Availability of tailored financing tools

The RFF support for energy communities is provided exclusively through capital grants in the form of non-repayable contributions which can cover up to maximum 40% of the investment costs. Other financing instruments that could better address different project profiles and risk structures—such as loans, guarantees or blended finance mechanisms—are currently not foreseen within the framework. Additionally, only RECs located in municipalities with less than 50.000 inhabitants are eligible. 

Nevertheless, several Italian regions have made use of Cohesion and Regional Development Funds and have launched dedicated calls to provide financial support also to Renewable Energy Communities located in larger municipalities. Moreover, these grants can be combined with the incentive tariff for energy sharing, provided that the public funding does not cover more than 40% of the investment costs. This makes it possible to design tailored business plans that strategically combine the two support measures (capital grants and incentive tariffs).

Link to a wider scope of activities and objectives

Link between energy communities, building renovation and energy efficiency

According to the provisions of Legislative Decree No. 199/2021 (Article 31), Renewable Energy Communities may engage in a broad range of activities, including the production, sharing, storage and sale of renewable electricity; the production and sharing of other forms of renewable energy (e.g. thermal energy); the promotion of energy efficiency and home automation measures; the provision of electric vehicle charging services to members; and the delivery of ancillary and flexibility services to the grid. While building renovation is not explicitly mentioned, certain renovation interventions may, in principle, fall under the category of energy efficiency measures. 

However, the current legislative framework provides fully operational provisions primarily for electricity production, sharing, storage and sale, while detailed implementing rules for other activities have not yet been fully developed.

Recognition of energy communities under multiple objectives

Energy communities are recognised as contributing to multiple policy objectives, notably greenhouse gas emission reductions, energy savings and the fight against energy poverty. They are also identified as a strategic instrument to support rural areas and small municipalities, strengthening local development and social cohesion alongside the energy transition.

Transparency and inclusiveness

Holistic strategy to provide financing across different levels of project development

A holistic strategy is envisaged under the Italian RRF to support energy communities across different stages of project development. Support is provided not only for investments, but also for capacity building and for legal, technical and administrative assistance, as well as for project preparation and development activities.

Transparency of the design and communication of the schemes and measures

A public consultation was carried out on a draft version of the Ministerial Decree intended to finalise the implementation of Legislative Decree No. 199/2021, concluding at the end of November 2022. However, no specific consultation process was undertaken for the definition of the Recovery Fund measure dedicated to Renewable Energy Communities.

Furthermore, the MASE did not carry out any consultation or promoted any adequate information process in conjunction with the recent reallocation of PNRR funds allocated to Renewable Energy Communities (see above); as a result, the sudden decision to reduce the resources dedicated to this measure caused confusion and concern among operators.

Selection criteria and the prioritisation of various social components

Access to Recovery Fund resources for energy communities has been primarily based on a demographic criterion, namely the number of inhabitants: only Renewable Energy Communities established in municipalities with fewer than 50,000* inhabitants (*fewer than 5,000 inhabitants in its initial formulation) are eligible for funding. Additional criteria that could further prioritise or differentiate access to funding have not been defined.

Decentralised tender process

The design and management of the tendering procedure for the allocation of Recovery Fund resources is centralised and defined exclusively by the Ministry of the Environment and Energy Security (MASE).

Existence of procedures to facilitate the participation of energy communities in open calls

Some procedures have been put in place at regional level to facilitate access to RRF funding for energy communities. For instance, the Lazio Region signed an agreement with the Engineering Department of Sapienza University of Rome to organise information sessions and provide capacity building and technical support. Similarly, the Veneto Region established cooperation agreements with Provinces to implement information and training activities and to set up local information desks.

Finally, since the dedicated portal for applying for PNRR funds was activated, the GSE has organised numerous webinars and taken part in several in-person events to provide information and clarifications.

Stability and predictability of the programme through time

Access to financing under Measure 2, which was linked to PNRR funds, closed on 30 November 2025. Access to the incentive tariff under Measure 1, by contrast, remains open and will continue until 31 December 2027 or until the national cap of 5 GW of incentivised capacity is reached, whichever occurs first.

Unfortunately, although the support scheme adopted by the Italian Government is overall rather effective, its actual effectiveness and predictability have been reduced both by significant delays in the approval of the implementing measures (e.g. definition of rules, opening of the online portal) and by corrective changes introduced at a very late stage and without prior consultation with stakeholders (e.g. raising the threshold from 5,000 to 50,000 inhabitants and the final cut to the overall allocated resources).

REPowerEU

Inclusion of energy communities in national REPowerEU chapter

This information is not available yet.