UPDATE 3-Italy sets new incentive rules for renewable energy

Thu Mar 3, 2011 6:47pm GMT

* No 8,000 MW cap on incentives, but annual caps from June

* Current incentive scheme to be replaced from June

* Limits will be put on farmland use for solar plants

* Italian associations concerned, could appeal

(Adds reaction in 7th and final paragraphs)

By Alberto Sisto

ROME, March 3 (Reuters) - Italy removed a much feared cap on incentives for solar power production on Thursday when it set new rules for renewable energy, but other measures in the package could slow down solar growth.

A new renewable energy decree, part of the European Union's efforts to fight climate change, removed an 8,000 megawatt limit on photovoltaic production incentives, which had been expected to rein in galloping growth of the Italian sector.   Continued...

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