Gilatz builds another solar plant in Italy, capitalizing on the country’s hefty solar subsidies.
Solar is going viral, and can be profitable too. Gilatz Investment, a publicly traded company on the Tel Aviv Stock Exchange, has signed a deal through a subsidiary for the construction of a third 2 MW solar power plant in Italy, according to a Globes report.
According to the Globes correspondent, Gilatz expects that of the plant’s $1.1 million annual revenue, 85% will be profit. Partly this is possible as the new plant, which is should be completed later this year, will take advantage of the Italian government’s 20-year subsidiary of 38 cents per kilowatt-hour on electrical sales.
The plant will be the company’s third asset in Italy following a similar deal last month when the company announced its first project outside of Europe in Northern Israel.
Gilatz goes global
In April, Gilatz signed a letter of intent to acquire seven solar plant parks in Italy with a combined production capability of seven MW. When completed the seven solar energy parks currently under construction will cover 213,000 square meters, and cost $33 million.
The stock market reacted positively to the news as the company’s stock rose to give the company a market cap of $113 million.
The incentives offered by the Italian government are reported to have been a major factor behind the company’s decision to expand its presence on the Italian market. According to Bloomberg, the decision has led to a veritable gold rush of foreign companies that are taking advantage of the price regulations that allows them to sell electricity at six times the price paid for coal or gas generated power.
When the subsidies subside
However, it should be pointed out that while similar initiatives in Germany allowed the country to climb to the top spot of MW of electricity generated from solar power, in a few years the government is expected to cut back on its subsidies.
The plant will generate electricity with photovoltaic panels, which is currently the fastest growing sun–to-electricity conversion technique.
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Above image via Mountain/\Ash