Markets
Bankability in Italian utility-scale PV: five recurring DD gaps
Italian utility-scale PV is firmly on the radar of institutional capital. Yields have compressed. Auction dynamics have shifted. Portfolios that would have been called too fragmented a few years ago are now underwritten as aggregated platforms.
DD, in most cases, has not kept up.
We have been on both sides of enough transactions to see a pattern. Deals fail, or fail to close on time, for the same five reasons. Almost never about the physics of the plant.
Gap 1: The authorisation stack
A plant in operation can still carry non-trivial risk on its authorisation chain. Autorizzazione Unica, PAS, environmental authorisations, connection agreements and land-use approvals are not redundant — they are layered, and some expire or can be challenged after commissioning.
A PDF of the AU is a starting point, not a clearance. The DD needs to reconstruct the full chain, confirm authorisations align with what was actually built (design variants happen), and check open or time-barred administrative appeals.
Gap 2: Land agreements that outlast the incentive
Land contracts — superficie, lease, easement — are often written to match the original incentive horizon. When the plant keeps operating beyond that (repowering, lifetime extension, post-incentive merchant tail), land terms become the binding constraint.
We often find clauses that silently reassign infrastructure ownership to the landowner, or that require renegotiation right when the asset becomes a merchant play. Recoverable — only if identified early.
Gap 3: Interconnection capacity that may not stay yours
A domanda di connessione granted under one regulatory vintage is not automatically preserved under the next. Terna and the DSOs have become more active in reviewing and, in some cases, revising connection conditions. An acquisition underwriting should not treat the soluzione tecnica minima as immutable.
Gap 4: O&M contracts that quietly leak yield
Full-service O&M contracts in Italy range from excellent to ornamental. The question is not the headline price. It is what the contract actually guarantees — PR bands, availability SLAs, spares inventory, response times — and what the operator can realistically deliver.
We routinely see contracts where the SLAs are notional and the KPIs are not verifiable against the monitoring data the asset manager receives.
Gap 5: Monitoring data no one asked to see
This is the gap that has surprised us most. On most DD engagements the monitoring platform data is available, but has never been aggregated against contractual KPIs, never benchmarked against plant-model predictions, never read alongside the O&M contract.
A single integrated pass over monitoring data, plant model and O&M contract surfaces more material issues than any desktop review.
The common thread is that all five are integration problems. The individual documents are clean. The interactions are where the value — or the risk — lives. That is why DD done in silos, with each workstream reporting separately, misses them so often.
If you’re looking at an Italian PV acquisition and want a second read from a developer before signing, write to us early.