Markets
Bankability in Italian utility-scale PV: five recurring DD gaps
In our experience, Italian utility-scale PV is now firmly on the radar of institutional capital, and we increasingly see portfolios that would have been called too fragmented a few years ago underwritten as aggregated platforms.
In our view, DD has not kept up in most cases.
The due diligence work we have done keeps showing the same pattern: deals fail, or fail to close on time, for the same five reasons, and almost never because of 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. Permits carry validity periods and grounds for lapse (start and completion of works, entry into operation, financial guarantees) that have to be checked retrospectively even on a plant that is already built, and some can still 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 pending administrative appeals and any challenge periods that have not yet run out.
Gap 2: Land agreements that outlast the incentive
In the portfolios we see, 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 hand ownership of the infrastructure to the landowner, or that force a renegotiation just as the asset turns merchant. Under a fixed-term diritto di superficie (surface right), no clause is needed: when the term expires, the landowner becomes the owner of what was built (art. 953 of the Italian Civil Code). These situations are recoverable, but only if identified early.
Gap 3: Interconnection capacity that can be lost
For projects still in development, the connection solution is not automatically preserved. Under ARERA's TICA (art. 33), for plants above 1 MW the soluzione tecnica minima generale (STMG) set out in the grid operator's quote stays valid for 210 working days from acceptance for medium-voltage connections and 270 for high and extra-high voltage, net of the operator's validation time. If permitting, including any environmental impact assessment (VIA), is not complete by then, the STMG becomes merely indicative.
At that point the grid operator re-checks whether it can still be built: if not, it issues a new one or, once permitting is complete, the quote lapses (TICA, art. 33, paragraphs 33.5 to 33.7). In 2025 ARERA rejected two complaints against a distributor's decision not to confirm the STMG for batches of PV plants (decisions 2/2025/E/eel and 134/2025/E/eel).
Decree-Law No 21 of 20 February 2026 added a second constraint. Art. 10-bis of Legislative Decree 190/2024, which that decree introduced, provides that transmission-grid connection solutions already issued and not validated by Terna for projects not yet permitted or authorised lose effect from the publication of ARERA's implementing measures (paragraph 3), and that Terna allocates grid capacity definitively only to permitted or authorised projects (paragraph 5).
An acquisition underwriting should not treat the STMG as immutable.
Gap 4: O&M contracts that quietly leak yield
In our experience, 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.
In our experience, a single integrated pass over monitoring data, plant model and O&M contract surfaces more material issues than a document-only review.
The common thread is that all five are integration problems. Taken one by one, the documents are often clean: the value, or the risk, lives in the interactions. That is why, in our view, DD done in silos, with each workstream reporting separately, misses them so often.
If you are looking at an Italian PV acquisition and want a second read before signing, write to us early.
Sources
Permits: Legislative Decree No 190 of 25 November 2024, art. 8 (simplified authorisation procedure, PAS) and art. 9 (single authorisation), paragraph 11 of each (validity and lapse), text in force on Normattiva; this is the current regime, while plants already in operation often hold permits issued under the earlier rules. Environmental impact assessment: Legislative Decree No 152 of 3 April 2006, art. 25, paragraph 5. Challenges: Code of Administrative Procedure (Annex 1 to Legislative Decree No 104 of 2 July 2010), art. 29 and art. 41, paragraph 2.
Surface rights: Italian Civil Code, art. 953 (Normattiva).
Grid connection: ARERA, TICA, Annex A to Resolution ARG/elt 99/08 of 23 July 2008, consolidated text as amended up to Resolution 361/2023/R/eel, art. 1(1.2)(e) and art. 33 (version published on the ARERA website, accessed on 2 October 2026); ARERA, decision 2/2025/E/eel of 14 January 2025 and decision 134/2025/E/eel of 1 April 2025; Decree-Law No 21 of 20 February 2026, art. 7, converted by Law No 49 of 10 April 2026, which inserts art. 10-bis into Legislative Decree 190/2024 (Normattiva). Italian sources are in Italian.
Update of 2 October 2026: Gap 3 rewritten on the basis of TICA art. 33, the 2025 ARERA decisions and art. 10-bis of Legislative Decree 190/2024, which was introduced after first publication; validity and lapse of permits, challenge periods and the effect of art. 953 of the Civil Code clarified; market statements without a primary source removed, and observations that come from our own experience marked as such. Sources checked as of 2 October 2026. This article is not legal advice.