After years of rapid growth, Italy’s renewable energy sector is approaching a critical turning point. Regulatory milestones, infrastructure constraints and evolving investor strategies are reshaping this dynamic and high-potential market.
In our recent webinar, industry experts explored the latest M&A trends, financing developments and challenges facing the country’s renewable energy and storage sectors.
Here are five key takeaways from the discussion.
1. M&A activity is poised for a turning point in 2026
After a flurry of acquisitions in 2023 and 2024, Italy’s renewable energy market experienced a pause in activity this year as investors awaited clarity on subsidies and regulations. But 2026 is shaping up to be a year of major change.
“A few years ago, we saw many players just trying to get as much pipeline as they could,” explained Valerio Ingiusto, Director at Finergreen. “The idea was to have a critical mass, just buying, buying, buying – no matter what stage of development they were in.”
But 2025 brought a slowdown. “Infra funds and utilities focused mainly on operating assets,” said Valerio. “But these were still operational assets, so bread and butter projects. We didn’t see a lot of M&A activity in the greenfield sector.”
Valerio predicts 2026 will be different. “Most of these players are developers or small IPPs that do not have enough capability to sell or build these projects by themselves. So we do expect the market to move, and when it does, it’ll have a huge impact.”
2. Financing for battery storage and solar PV is finally maturing
Project finance for battery energy storage systems (BESS) has historically been limited in Italy. But once again, 2026 could be a breakthrough year.
“For BESS, there was no bankable go-to-market strategy. So, BESS was basically not financed at all,” said Piero Bianchini Riccardi, Senior Transaction Manager at ib vogt. By contrast, solar PV benefited from long-standing auctions and hybrid PPA structures that made projects easier to underwrite.
Now, banks are starting to catch up. “Banks are finally trying to offer products that are really similar to what have been, in the last year, the standard for a PV project finance,” Piero explained.
The challenge is scale. “Next year, they will have 10 gigawatts of PV assets plus 10 gigawatts of BESS assets that need to be financed,” he added. “It’ll be challenging for the banking system to follow this new wave of projects.”
3. Grid congestion and revenue uncertainty remain significant hurdles
Italy’s grid is straining under the weight of its renewable ambitions. The country has seen a surge of development applications, far exceeding current capacity and creating a major bottleneck for investors.
“There are over 350 gigawatts of pending requests, compared to the national capacity target by 2030, which is 65 gigawatts,” explained Marta Vizcaíno Martín, CEO at TetraxAI. “This means there are projects that are not viable that need to die.”
Authorities are planning to cancel speculative or dormant projects, but this may trigger legal disputes. Revenue uncertainty is compounding the challenge, raising concerns about the bankability of future projects.
“The question that everybody asks themselves is: will Italy be the next Spain?” said Valerio.
For now, that seems unlikely. Italy differs from Spain due to its strong industrial demand, reliance on gas and absence of nuclear power, which all support a higher baseline for electricity prices.
4. Opportunities continue to emerge in the south, but offshore appears off the cards
Southern Italy is at the heart of renewable development, combining abundant solar and wind resources with urgent grid flexibility needs. The islands also offer strong potential, but persistent connection constraints mean they depend on tailored incentives to unlock investment. These limitations are already shaping developers’ strategies.
“There are rumors about a new decree, which would cancel connection solutions for projects that are not in the authorization process,” said Piero. “As grid saturation increases, developers may need to look north for new opportunities.”
Meanwhile, offshore wind, still in its infancy in Italy, could represent the next frontier – but significant challenges remain. “The Mediterranean is much deeper than the Baltic Sea, where offshore technology is usually based, and this brings additional costs to the CapEx,” warns Valerio. “If we see the first authorized project in 2026, I think it’ll be a political thing rather than a development thing.”
5. Lessons can be learned from other markets
Italy can learn from international peers, such as the UK, which has successfully combined regulatory clarity, grid flexibility and market mechanisms to support renewable investments.
“The UK has pioneered mechanisms such as Contracts for Difference and capacity markets,” said Marta. “This provides predictable revenue streams and makes projects bankable. Italy could adapt similar schemes to attract institutional investors.”
Clear, stable regulations and enhanced grid infrastructure are essential if Italy is to maintain investor confidence while scaling renewables and storage projects.
A new chapter for renewables M&A
Italy’s renewable energy sector is entering a period of consolidation and strategic realignment. For investors, developers and infrastructure funds, understanding these market trends is critical.
The next few years will reveal which players can navigate the complex Italian renewable landscape, securing profitable projects and long-term competitive advantage.
